How to maximise generation income in 2025

The Labour government is putting in place multiple measures to accelerate the UK’s progress towards clean energy by 2030.

Increasing the volume of renewable generation and electricity storage is key to this – and independent generators, as well as businesses, have an important role to play.

However, installing generation or storage assets requires significant investment. So ensuring you get the best return on that outlay is important.

1. Take necessary steps to reduce your overheads

For starters, it makes sense to minimise your overheads.

Ironically, importing energy to operate your energy-generating or storage assets may be a significant part of these ongoing costs.

Yet thanks to exemptions instigated by energy regulator Ofgem, energy used for this purpose can avoid a significant share of the non-energy elements added to electricity invoices. Although this has been the case for a few years now, surprisingly, many generators have still not applied for this exemption.

Businesses who generate alongside other acivities to participate in any balancing or ancillary service with the National Energy System Operator (NESO) may also qualify for exemptions on the share of energy they import for generation purposes, provided they have separate metering and meet certain criteria.

To qualify, you need to approach your local Distribution Network Operator and ask for a ‘non-final demand certificate’. Once you have this certificate, it needs to be passed to your supplier to action.

Your supply should then be exempted from the residual element of the following charges:

• Balancing Service Use of System (BSUoS): this covers the NESO’s costs to balance supply with demand on the national grid. This charge is all residual, and changes month to month. As of April 2025, it will be £10.74 per megawatt hour (MWh) of imported power.
• Distribution Use of System (DUoS): this covers the cost of distributing electricity on the regional distribution networks and varies considerably by region and site. To give an example, a band 4 high-voltage site in the West Midlands could pay around £1.11 per day per meter in 2025/26 without the residual element, versus around £65.85/day with it.
• Transmission Network Use of System (TNUoS): this covers the cost of the main electricity transmission network (the UK’s pylons). Around 90% of this charge is residual, which until April 2025, is around £243.63 per day for a band 4 high-voltage site.

It’s worth noting that these exemptions can only be applied from the date of your certificate, and not back dated.

2: Review your export arrangements

I probably don’t need to remind you that the energy market is volatile and conditions highly changeable.

But you may not realise this makes it even more important to regularly review your export arrangements.

How you access the market – be it via a Fixed, Flexible or Index-linked deal – can make a big difference to your income.

And while Fixed contracts are often the deal of choice for the ease of management and certainty they provide, Flexible contracts don’t have to be hard to manage. And they still provide a route to lock-in to a fixed price for set periods of your choosing – with the advantage of being able to unlock volume if the market picks up.

As an example, there was a £4-5/MWh difference between Day Ahead prices between early December and two weeks later. Had you fixed too soon, you’d have lost out on significant income.

So to find out more about taking advantage of new types of contract for 5GW of export or more – including features and support to make it easier to maximise income – do get in touch with one of our Generation Services experts.

Our team are also on hand to advise on minimising your energy import costs too.