Published figures point to higher balancing charges from April 2027: NESO's draft tariff is £21.67/MWh for April to September 2027, up from £13.74/MWh, driven by constraint costs and wholesale prices. The Climate Change Levy rises to 0.827p/kWh and is then frozen, while the Renewables Obligation falls to 0.369 certificates per MWh. These are published forecasts and decisions from the bodies that set the charges, not our predictions.2,7,5
Charge by charge
| Charge | 2026/27 | Next published figure | Status |
|---|---|---|---|
| Balancing (BSUoS) | £13.74/MWh (Apr to Sep 2026); £12.49/MWh (Oct 2026 to Mar 2027) | £21.67/MWh (Apr to Sep 2027); £18.42/MWh (Oct 2027 to Mar 2028)1,2 | Draft; final tariffs due December 2026 |
| Renewables Obligation | 0.472 certificates per MWh (about £32.73/MWh) | 0.369 certificates per MWh from April 2027 (about £25.59/MWh at this year's buy-out price), or 0.394 if the manufacturers' relief is in place in time3,4,5 | Published; buy-out price for 2027/28 not yet set |
| Climate Change Levy | 0.801p/kWh | 0.827p/kWh from April 2027, then frozen at that level from April 20287,8 | Confirmed |
| Contracts for Difference | £0 to £10.56/MWh during the year | £2.98/MWh for January to March 20279 | Set quarterly; moves opposite to wholesale prices |
| Nuclear RAB | £3.68 to £5.15/MWh during the year | £3.68/MWh for January to March 20279 | Set quarterly |
| Capacity Market | £3.47 billion for October 2026 to September 2027 | The next year's total is published the summer before it starts9,13 | Published annually |
| Transmission (TNUoS) | Fixed daily charges by band | A proposal (CMP440) to reintroduce demand transmission charges from April 202710 | Proposal; awaiting decision |
| Distribution (DUoS) | Set by each network operator | New price control for 2028 to 2033; Ofgem to approve the settlement by the end of 202711 | In preparation |
Balancing costs are forecast to rise
NESO's draft tariffs for 2027/28 are £21.67/MWh for April to September 2027 and £18.42/MWh for October 2027 to March 2028. NESO attributes the rise to higher constraint costs (up 32% for the first period) and higher wholesale prices (up 33%).2 Final tariffs are published each December.1
Relief for manufacturers moves costs to others
From 2027 the British Industrial Competitiveness Scheme will cut electricity costs for eligible manufacturers by up to £40/MWh, by exempting them from the indirect costs of the Renewables Obligation, Capacity Market and Feed-in Tariffs.6 Exempt electricity doesn't carry these costs, so they are spread over everyone else. The government's own calculation shows the 2027/28 Renewables Obligation level for other users rising from 0.369 to 0.394 certificates per MWh if the scheme is in place in time.5
Networks: a new price control from 2028
Ofgem has set out how it will judge the distribution network operators' plans for 2028 to 2033, and will approve the final settlement by the end of 2027. It expects demand on distribution networks to rise, while promising tighter cost controls to stop unnecessary investment being recovered through bills.11 Separately, NESO's CMP440 proposal would reintroduce demand transmission charges from 1 April 2027.10 Check for Ofgem's decision before relying on it.
Levies that track wholesale prices
The CfD levy moves the opposite way to wholesale prices: it fell to £0/MWh from 5 November 2026 and is set at £2.98/MWh for January to March 2027.9 If wholesale prices stay high, it may stay low; if they fall, it will rise.
The temporary VAT zero rate ends in June 2027
The 0% rate for qualifying supplies in Great Britain, including charities' non-business use and very small business supplies, runs from 1 October 2026 to 30 June 2027.12 Most business electricity is unaffected and stays at 20%.
What you can do
- Check your contract to see which non-energy charges are fixed and which are passed through when they change.
- Look at your use between 4pm and 7pm on winter working days. The Capacity Market charge is based on it.13 Your half-hourly data shows exactly how much falls in that window.
- Check your agreed capacity. Transmission charges for low-voltage sites are banded by it. See supply capacity.
- Cut use while closed. Most charges are per unit, so every unit saved reduces them. Start with out-of-hours use.
Sources
- NESO: BSUoS final tariffs for 2026/27 (December 2025)
- NESO: BSUoS draft tariffs for 2027/28 (October 2026)
- Department for Energy Security and Net Zero: Calculating the level of the Renewables Obligation for 2026 to 2027 (29 September 2025)
- Ofgem: Renewables Obligation buy-out price and mutualisation threshold and ceilings 2026 to 2027 (31 March 2026)
- Department for Energy Security and Net Zero: Calculating the level of the Renewables Obligation for 2027 to 2028 (25 September 2026)
- Department for Business and Trade: British Industrial Competitiveness Scheme (updated 1 October 2026)
- HM Revenue and Customs: Climate Change Levy rates (updated 27 November 2025)
- HM Revenue and Customs: Climate Change Levy rates from 1 April 2028 (28 October 2026)
- EMR Settlement: Key figures for payments 2026/27 (CfD and nuclear RAB levy rates, Capacity Market payments)
- NESO: CMP440 workgroup report, re-introduction of demand TNUoS (April 2026)
- Ofgem: Ofgem sets rules for 2028 to 2033 grid investment to meet growing electricity demand (21 May 2026)
- HM Revenue and Customs: VAT on fuel and power (VAT Notice 701/19, updated 28 October 2026)
- EMR Settlement: G15 Capacity Market supplier payments guidance
Questions people ask
Will non-energy electricity costs go up in 2027?
Some will. NESO's draft balancing charge for April to September 2027 is £21.67/MWh, up from £13.74/MWh, and the Climate Change Levy rises to 0.827p/kWh. The Renewables Obligation level falls. Final balancing tariffs are published in December.
What is the British Industrial Competitiveness Scheme?
A scheme starting in 2027 that cuts electricity costs by up to £40/MWh for eligible manufacturers by exempting them from the indirect costs of the Renewables Obligation, Capacity Market and Feed-in Tariffs.
Will the Climate Change Levy keep rising?
The electricity rate rises to 0.827p/kWh from April 2027 and is then frozen at that level from April 2028, according to HMRC.
