TNUoS Rise 2026/27: What SME Renewals Should Assume

Why the bill jumped in April

When a client rings to ask why their electricity invoice rose sharply from April, the answer is usually one line item: Transmission Network Use of System (TNUoS). NESO published the final 2026/27 tariffs on 30 January 2026 and they took effect on 1 April 2026 (NESO, Final TNUoS Tariffs for 2026/27). The volume weighted average rise in the residual charge paid by consumers was around 64% year on year, with individual banding types moving by roughly 28% to 116% depending on voltage and size (Drax analysis of the final tariffs).

Two things drove it. The first was the start of the new transmission price control, RIIO-ET3, on 1 April 2026, which allows a much larger volume of network investment to be recovered from users. The second was the Accelerated Strategic Transmission Investment (ASTI) framework, which has pulled major reinforcement projects forward so the costs land earlier than older forecasts assumed (Ofgem ASTI decision). The net effect was close to a doubling of the demand residual revenue that NESO has to collect from final demand.

What the numbers look like

The cleanest single figure for broker conversations is the average residual expressed per unit. For 2026/27 it sits at roughly £25.70/MWh, against roughly £15.70/MWh in 2025/26, so about £10/MWh more on average (EDF summary of NESO's final tariffs). Treat that £/MWh number as a conversion rather than a tariff. The charge itself is fixed.

On scale, NESO's own reporting puts demand revenue for 2027/28 at £7.73bn, which is £1.35bn above the level set in the final 2026/27 tariffs (NESO, Initial TNUoS Tariffs for 2027/28 webinar pack). The residual makes up over 90% of what a typical business pays under TNUoS, so everything else is detail by comparison.

Band, not usage: how the post-TCR residual works

Since Ofgem's Targeted Charging Review, the TNUoS demand residual has been recovered from final demand as a fixed charge in pounds per meter point per day (Ofgem TCR decision). It is not a p/kWh charge and it is not based on peak demand. Each MPAN sits in a banding type set by its connection voltage and its assessed annual consumption: low voltage bands 1 to 4, LV substation, high voltage, and site specific for extra high voltage and directly connected sites. Larger bands pay materially more per day, which is why the percentage increases spread so widely across band types.

Both half-hourly and non half-hourly SME sites are in scope. A small shop or office on an NHH meter in LV Band 1 or 2 pays a modest daily amount. An HH-settled factory or cold store in LV Band 4, LV substation or HV pays several times that. Because the charge is per day per MPAN, multi-site clients feel it multiplied by their meter count, not by their consumption.

Zone still matters, but through the other component. Final demand also pays a zonal locational element based on the NESO demand zone the MPAN sits in. Northern zones can carry negative locational tariffs and southern zones positive ones, so two sites in the same band with the same consumption do not pay the same total. Before you explain a difference between a Scottish site and one in the South West, check the band and the zone.

Worked examples

Use the average £10/MWh equivalent uplift as a sense check, then confirm against the published band tariff for the client's actual band and zone.

• NHH retail unit, 30,000 kWh a year, LV band: roughly £300 a year more than 2025/26 on average terms, arriving as a higher daily standing element rather than a higher unit rate. Clients on flat monthly direct debits often see this as a sudden catch-up in the April or May invoice.
• HH bakery, 400,000 kWh a year, LV substation: roughly £4,000 a year more on the same average basis. Where the supplier held a fixed all-inclusive price through to a contract end date in, say, September 2026, the client saw nothing in April and meets the whole step change at renewal instead.
• Low load factor HH site, 120,000 kWh a year across three meters: the worst shape for this charge. Three fixed daily amounts spread over modest consumption can push the effective TNUoS rate well above the £25.70/MWh average, because the denominator is small.

That last case is the one brokers most often get wrong in a like-for-like comparison.

Is a 2027-start quote really fixing TNUoS?

Final 2027/28 tariffs are not published until January 2027, so every fixed price quoted this autumn for an April 2027 or later start is built on a forecast. Ask the supplier four things, in writing:

• Is TNUoS fully fixed for the whole term, including the tariff change on 1 April 2027 and any later April changes within the term?
• What TNUoS assumption is baked in, expressed as £/MWh or as the £/day band tariff used?
• Which contract clause allows recovery if actual tariffs exceed the assumption: change in law, third party costs, or a named pass-through schedule?
• Does the fix survive a change in the site's band or settlement class during the term?

A genuine fix will state that non-commodity charges are fixed, and will usually carry a visibly higher unit rate to cover the risk. A pass-through contract names TNUoS in a list of charges billed at prevailing rates. A third pattern is common and easy to miss: fixed for year one, then reconciled or re-based from April. Where the quote does not say which of these it is, treat it as pass-through until proven otherwise.

What to assume for 2027/28

NESO's initial 2027/28 forecast, published on 11 May 2026, indicated around a 23% increase in the fixed charge for most business bandings against 2026/27 (Drax on the initial forecast). NESO also noted its figures came in below the previous five year view, so the direction of travel for the forecast has softened even as the absolute level keeps rising.

For budgets and renewal comparisons quoted now, a 20% to 25% uplift on the current fixed residual is a defensible working assumption, with a sensitivity to 30%. Put two dates in the diary: the Five-Year View, due by 30 September 2026 and including an updated 2027/28 forecast, and the draft 2027/28 tariffs due by 30 November 2026 (NESO forecast timetable letter). Final tariffs follow in January 2027. Revisit any long-dated pass-through comparison once the draft lands.

What half-hourly data can and cannot tell you

HH data is still useful here, though not for the reason many brokers assume. It gives you annual consumption, load factor, capacity utilisation and site profile, which lets you convert a fixed £/day charge into a credible £/MWh figure and rank a client's sites by exposure. It also shows whether a site is a candidate for DUoS red band savings.

What it cannot tell you: the band itself, which comes from the network operator's assignment rather than the data; the demand zone, which comes from the MPAN distribution identifier; and anything about how the supply contract treats the charge. No amount of profile analysis reduces a charge levied per day. If a client's consumption falls 20%, the residual does not fall at all.

Load shifting: what changed, what still counts

Triads no longer exist for final demand, so shifting load away from winter evening peaks does nothing to the residual. That was the single biggest behavioural saving in the old regime and it has gone.

Timing still pays elsewhere. DUoS red band unit rates remain time-banded and remain avoidable. The Capacity Market supplier charge is levied on demand in winter peak hours, so cutting consumption then still cuts the levy. Wholesale shape and imbalance exposure both respond to profile. And because the TNUoS locational element is charged on units consumed, reducing total volume still reduces that part, even though moving it around does not.

For your autumn renewal conversations

• Pull each client's MPAN list and tag every meter with its banding type and demand zone before quoting; per-meter charges punish multi-site portfolios.
• Restate last year's TNUoS in this year's terms when comparing renewal offers, so a pass-through contract is not flattered by out of date assumptions.
• Get the fix or pass-through position in writing for any term crossing 1 April 2027, with the assumed TNUoS figure named.
• Warn clients on fixed direct debits that a step change in charges shows up as a catch-up invoice, not a rate change.
• Diarise the Five-Year View at the end of September and the draft 2027/28 tariffs at the end of November, then reissue budget figures to clients still deciding.