Non-commodity costs, the charges that pay for balancing the grid, funding new infrastructure, and subsidising policies like renewable and nuclear generation, now make up around 60% of a typical business energy bill. The latest Balancing Services Use of System (BSUoS) charge increase is the latest example, even though it only makes up a small proportion of that 60%.

For a site using 400 MWh a year (a typical hotel, office block or small manufacturer), this specific BSUoS increase adds roughly £2,860 on to what a business is already paying over the year.

Here's what's actually happening, and what we think has to change across the board.

What's actually happening

BSUoS pays for keeping the grid balanced, moment to moment. NESO, the National Energy System Operator, sets the rate twice a year based on what it expects balancing to cost over the next six months. Its draft tariffs for 2027/28 are £21.67/MWh for April to September 2027 and £18.42/MWh for October 2027 to March 2028, around 0.7p more on every kWh a business uses than previous tariffs. These are still draft numbers; NESO publishes the final rate in December.

It takes a lot to balance the grid

The honest answer for why this number is so high is that it's driven by two things at once: how much balancing the grid needs, and how expensive each unit of that balancing is any 30 minute period.

The volume side comes down to the grid itself: it can only safely carry so much power from Scotland, where a lot of Britain's wind generation sits, to the rest of the country, so the system operator has to hold some back as a safety margin. Turning on gas plants to replace the wind that was held back made up 71% of Britain's total balancing costs in 2024/25, up from 44% two years earlier. The real fix is building more physical grid infrastructure, but that's slow and expensive, and the cost ends up on bills too, just through a different charge, so it won't help in the short term. The government's newly announced grid investment vehicle, GB Grid, is aimed at exactly this problem, but how its cost gets funded will matter as much as how well it delivers.

The price side comes down to gas, which sets the cost of correcting imbalances, and gas prices are elevated right now due to geopolitical volatility. Despite NESO keeping a reserve fund to absorb short-term cost shocks, that combination has left a £1bn shortfall to recover from April 2027, which is why this increase is the size it is.

Volume and price feeding into each other is exactly why a charge like BSUoS is so hard to forecast months in advance, and why what's needed is a fix that doesn't depend on waiting for new grid to get built. The fixed-tariff approach to BSUoS was supposed to protect businesses from exactly this kind of shock, but it's showing the strain. That's worth saying plainly, not because any single team got a number wrong, but because it shows how little margin is left in a system this stretched, and how much of that strain ends up landing on bills.

Around 60% of your bill, running on a forecast

On its own, an extra £2,860 on a bill is a real number businesses need to wrestle with. But it's also part of a much bigger pattern: non-commodity costs like BSUoS, along with charges that fund grid reliability and clean power investment, now make up around 60% of a typical business energy bill. That share has grown substantially as successive governments have charged bill payers for new policies, and it's set entirely outside any business's control to change, ours included.

The problem isn't that these costs exist or that nobody plans for them. Grids need balancing, infrastructure needs funding, and the transition to cleaner power needs paying for. NESO also forecasts these costs well in advance. The problem is how thin the margin gets once something like a gas price shock hits: because gas sets the price for balancing the grid, a geopolitical spike ricochets straight through the forecast, and the gap between the number published in draft and the one confirmed months later still lands on businesses on a timetable that has nothing to do with when they actually need to budget.

What we've proven, and what we think should follow

Our energy transaction infrastructure, Rosso, prices energy across thousands of businesses and generators from a live, constantly updated view of the system, because we don't think the commodity side of a bill has to be opaque, priced through a maze of intermediaries, or explained after the fact. We're constantly proving that inside our own book.

We think the same standard should apply to the other side of the bill too. If a live, clear, constantly-updated view of pricing is possible for the part of a bill that's commodity and margin, there's no reason the other 60%, the non-commodity costs, has to stay stuck on a forecast-in-draft, correct-in-December cycle, set entirely outside anyone's view.

Where we stand

We don't believe the answer is exempting any one type of business from costs like this, that just shifts the bill onto someone else. What we’d argue for is moving volatile non-commodity costs like BSUoS off individual bills and into general taxation, where the cost of running this market is shared fairly, rather than landing, unpredictably, on whoever's contract happens to renew at the wrong time.

We'll keep making that case at every table where we have a seat, and keep showing businesses exactly what's driving their bill in the meantime.

Claire, at tem