The UK’s energy market is undergoing rapid change as clean power moves from ambition to reality. While businesses have become accustomed to understanding and managing the volatility of commodity prices, rising non-commodity charges now represent a more pressing challenge explains npower Business Solutions’ Chief Operating Officer, Anthony Ainsworth.
Delivering the scale of renewables to meet the UK’s clean power targets means building significant new infrastructure to connect and transport power. However, this transformation comes at a cost. Every business in the UK is now facing a sharp increase in non-commodity costs, which will help fund the infrastructure needed.
According to our Business Energy Tracker 2025, which draws on data from over 130 large energy users, energy remains the top risk businesses are facing for the fourth year running.
The report also revealed that 79% of businesses predict their energy costs will rise over the next 12 months, and more than half (54%) say they are having a negative impact on business confidence.
In addition, 97% of businesses surveyed said they are worried about the financial impact of the low-carbon transition, while half believe that non-commodity costs are unfair.
That said, while many respondents noted that these charges have increased over the past year, there was support for the clean power mission. Many understood the benefits it would bring, and more than half (57%) also understood that they will need to bear some of the costs for the low-carbon transition.
Managing the non-commodity risk
While organisations cannot control policy or infrastructure costs, they can take steps to reduce their exposure. These include:
- Reduce your energy consumption: while it’s difficult to control your non-commodity costs, you can control your energy consumption. Investing in energy efficiency and other energy reduction measures can have a positive impact on the amount you pay for energy.
- Consider on-site generation: 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.
- Reduce your network capacity: if you are able to do this, then you can reduce your Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges.
- Load management: this can be an effective way to reduce peak CM costs.
Building a clean power system that works for all
The transition to clean power is an absolute necessity. However, the Business Energy Tracker shows that the concerns about the short-term cost of the delivery and the impact this could have on confidence and competitiveness, are very real and need to be addressed.
We’re ready to work with the government to ensure that, while we build a cleaner and more stable energy system, businesses receive the right support to ensure they remain competitive now and in the future.
Business Energy Tracker 2025 – The cost of clean power: will your business pay the price? is available to download now.
