Energy market outlook 2026: three key developments for UK businesses

1. Rising non-commodity costs will start to hit business energy invoices

Analysis from our Optimisation Desk shows that 2026 will be a huge year for non-commodity costs, with several set to hit invoices from April 2026, pushing business energy prices up by around £25 per megawatt hour (MWh).

The biggest increase is in Transmission Network Use of System (TNUoS) charges, which are set to double as the first year of RIIO-3 (Revenue = Incentives + Innovation + Outputs) gets under way.

At the end of January 2026, the National Energy System Operator (NESO) published its final TNUoS rates for the next charging year, starting this April. While these are very much in line with what we expected, the reality for businesses is that they will see their rates increasing by over 60% year-on-year.

In addition, gas network rates for the first year of the new RIIO-3 regulatory period were published, and these follow a similar trend – broadly unchanged from draft rates but still a significant increase from right now.

September 2026 is also predicted to be a major month, as decisions about some April 2027 costs are likely to happen.

So, in all, 2026 will be the year that non-commodity costs start to impact businesses in a big way as the transition to clean power by 2030 accelerates.

If you’re unsure about what this could look like for your business, then our Energy Cost Calculator can give you a view of the likely rises you could be facing in less than 60 seconds. This tool is regularly updated, and later this week it will reflect the new TNUoS charges that were published.

We discussed how this, and other charges, will translate into pounds per megawatt (£/MW) costs for businesses, and how to budget for 2026/27, in a recent webinar, which is now available on demand.

2. Support for Energy Intensive Industries (EIIs) is on the way

The Modern Industrial Strategy included details of two initiatives that are designed to support many of the UK’s most energy-intensive businesses with rising non-commodity costs:

• The British Industry Supercharger (BIS): this is an initiative to cover more of the electricity network charges EIIs normally have to pay. They currently get a 60% discount on these charges, and from April 2026, that will increase to 90%

• The British Industrial Competitiveness Scheme (BICSs): this would see a further 7,000 businesses supported with a reduction in charges and levies from 2027. The consultation on how this could work closed on 19 January 2026, with the outcome expected later this year

However, these initiatives only cover a relatively small number of businesses. As shown above, organisations of all sizes will be impacted by increasing industry costs, so we are continuing to work alongside the government to discuss how our customers could be supported.

3. Energy data will become an essential business tool

The systems underpinning the Market-wide Half-Hourly Settlement (MHHS) programme went live in September 2025, marking a huge change for the electricity sector. The aim is to support a more efficient, accurate, and flexible electricity system that is ready for Clean Power 2030.

2026 will see the migration continue for all businesses, with all electricity meters – including traditional meters – being migrated into new market segments. Metering services will also change to reflect the new MHHS requirements.

While the introduction of MHHS does not require you to change your meter, upgrading from a traditional meter to an Automated Meter Reading (AMR) or Smart meter would provide access to actual Half-Hourly (HH) data to support greater insight and energy efficiency. Businesses that actively engage with MHHS and make the most of this data will be the ones that see the most benefit.

In less than two minutes, learn more about why your energy meter a business essential.

Three steps businesses can take in 2026

While there is little businesses can do to control rising industry costs, there are steps they can take to minimise their impact.

1. Understand your energy data: one area where businesses can take some control is reducing their energy consumption. This is why it is so important to engage with MHHS and understand your energy data. Using an online data visualisation tool will also provide insight to help businesses to invest in energy efficiency and other energy reduction measures.

2.  Consider on-site generation: as well as helping businesses become more energy self-sufficient, while providing the opportunity to participate in flexibility schemes, any energy installed behind-the-meter (BtM) is not subject to industry costs such as Balancing Services Use of System (BSUoS), Contracts for Difference (CfD) or Capacity Market (CM) charges.

3. Reduce your network capacity: if you are able to do this, then you can reduce your Distribution Use of System (DUoS) and TNUoS charges.
   

2026: a year of opportunity and uncertainty

It is a familiar tale - with opportunity comes challenges. The long-term opportunities Clean Power 2030 brings for businesses in terms of a more stable, secure, and sustainable energy system, will come with short-term cost challenges for businesses. Similarly, the short-term changes businesses will see as the MHHS migration progresses will result in the long-term benefits of having access to more granular data.

As always, we are here to support businesses through these changes, so please get in touch if you would like to discuss the 2026 energy market outlook further.