Non-Commodity Cost Rises: The Invisible Bill Inflation
Non-Commodity Cost Rises:
The Invisible Bill Inflation
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ENERGY CONSULTANCY OF THE YEAR 2025
Publish Date:
July 1, 2026
Non-Commodity Cost Rises (The Invisible Bill Inflation)
While corporate buyers focus heavily on the wholesale market, non-commodity costs (delivered network charges and levies) are rising substantially, accounting for roughly 60% to 65% of a total electricity bill.
The regulatory changes implemented for the 2026/27 financial year directly impact Q3 budgets:
- Distribution Costs (DUoS) & Standing Charges: While initial April 2026 standing charges saw minor average relief (-6%), Maximum Import Capacity (MIC) charges rose by roughly 5%. Furthermore, Distribution Network Operators (DNOs) are heavily hiking infrastructure costs out to 2027 to fund grid modernisation.
- The Capacity Market (CM): CM costs have risen significantly, breaching the £10/MWh threshold as a smeared unit cost, driven by high auction clearing prices to secure grid reliability during tight periods.
- New Levies (RAB): The newly implemented Regulated Asset Base (RAB) Levy, designed to fund new nuclear infrastructure (e.g., Sizewell C), adds an interim rate of roughly £3.49/MWh (~0.35p/kWh) to corporate electricity bills through 2026.
- Climate Change Levy (CCL): The CCL continues its upward trajectory in 2026, increasing the tax burden on non-exempt business consumption.
Energy Market Report Q3 2026
How Can Advantage Help?
Our sustainability department continue offer an ever-increasing range of products and technology aimed at reducing energy consumption and associated costs as well as driving down carbon emissions.
We will of course continue to keep you updated around these initiatives, but please do reach out to your designated point of contact should you wish to explore your options in this regard.
In terms of procurement, we will of course continue to monitor markets with a view to helping customers navigate the unprecedented circumstances and ascertain when constitutes the best time to seek a contract extension.
Our popular flexible procurement options continue to be an option for an increasing number of clients on either a standalone basis or as part of a grouped basket. This often facilitates access today/month ahead trading markets which have proved to be particularly beneficial to many clients over the winter period.
BULLISH IN Q3
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IRAN WAR AND GEOPOLITICAL FALLOUT
COMPETITION FOR LNG
LOW EUROPEAN STORAGE
POLITICAL & ECONOMIC INSTABILITY AND UNCERTAINTY
RUSSIA/UKRAINE WAR
RANGEBOUND IN Q3
VOLITILITY & UNCERTAINTY
CARBON
STARMER RESIGNATION
BEARISH IN Q3
US-IRAN DEAL
RE-OPENING STRAIT OF HORMUZ
MILD SUMMER START
WHOLESALE FUTURES PRICES - ‘28 & BEYOND
TRUMP’S TARIFFS
GOVERNMENT RESHUFFLE
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