Electricity Costs for UK Businesses Set to Double

Updated: January 23, 2026

Electricity Costs Are Changing.  Here’s What It Means for Your Business

As we head into 2026, UK businesses are facing one of the biggest shifts in electricity pricing in decades.

Rising grid costs, higher standing charges and new government levies mean electricity bills could increase significantly, and for many businesses, the impact will have nothing to do with how much energy they use.

At GEAB, we’re already seeing confusion around what’s coming, who it will affect most, and what businesses can realistically do to prepare. This month’s briefing breaks it down.

 What’s Driving the Increase?

There are three key changes businesses need to be aware of:

1. Rising Grid Charges (The “Grid Tax”)
The UK is investing £3.7 billion to upgrade the electricity network to support renewable and low-carbon energy.
As a result, Transmission Network Use of System (TNUoS) charges are expected to rise by around 94% from April 2026.

2.  Higher Standing Charges
Instead of being added to your unit rate, many of these costs are built into the standing charge, the fixed daily fee you pay just to stay connected.
That means even low-usage sites could see bills rise.

3.  A New Nuclear Levy
From late 2025, a new Nuclear Regulated Asset Base (RAB) levy will be added to bills to fund projects such as Sizewell C. This is based on usage and will increase again in early 2026.

Big Business vs SMEs

One of the biggest issues we’re seeing is a widening fairness gap.

Around 500 of the UK’s most energy-intensive industrial sites will receive up to 90% discounts on network charges to remain competitive internationally.

Small and medium-sized businesses including shops, offices, hospitality venues and multi-site operators will not receive these exemptions and will absorb the full increase.

For SMEs, this means higher fixed costs regardless of usage.

What Large Businesses Should Be Doing Now

If you operate large or energy-intensive sites:

  • Check whether you qualify for network charge exemptions — and that they’re being applied correctly
  • Review contracted grid capacity (kVA) and reduce unused allowances
  • Model 2026 energy costs now to protect future budgets
  • Explore on-site generation, storage or demand management strategies

 What SMEs Should Be Doing Now

If you’re a small or medium-sized business:

  • Don’t assume “fixed” means fixed — many contracts allow pass-through charges
  • Pay close attention to your standing charge
  • Reduce unused grid capacity to cut fixed costs
  • Compare tariff structures, including lower standing charge options
  • Seek advice early — waiting reduces your options

The Key Takeaway

Electricity pricing is no longer just about consumption.

From 2026, how your contract is structured could matter as much as how much energy you use — especially for SMEs.

Awareness and preparation now can help avoid unnecessary cost shocks later.