New UK electricity network charges take effect from April 2026, raising fixed costs for commercial and industrial users under Ofgem's RIIO-T3 price control
From 1 April 2026, updated electricity network charging arrangements have come into force across the UK, marking the start of a new transmission price control period that runs until March 2031. The changes centre on a rise in TNUoS (Transmission Network Use of System) Demand Residual charges — the levies used to fund investment in the UK's high-voltage electricity transmission infrastructure — as well as an increase in the CCL (Climate Change Levy), a statutory environmental tax applied to non-domestic energy consumption. These charges are set by Ofgem under its RIIO-T3 (Revenue = Incentives + Innovation + Outputs, third period) framework, which governs how much network operators including National Grid Electricity Transmission can recover from users via network charges. The new price control period introduces higher fixed costs for commercial and industrial energy consumers, and the charging bands under which businesses are classified — which determine their TNUoS exposure — will remain in force for the full five-year period, creating long-term cost certainty but also locking in elevated charges for those in higher bands. The legal and regulatory implications are significant. Energy-intensive businesses face material increases in their energy procurement costs, driving demand for advice on power purchase agreements (PPAs — long-term contracts to buy electricity directly from generators, often at fixed or capped prices), demand-side response strategies, and corporate grid connection arrangements. The higher levy rates also sharpen incentives to invest in on-site generation and storage, which in turn requires planning, licensing, and grid connection legal support.
Why this matters
The entry into force of RIIO-T3 charging creates immediate legal demand from energy-intensive corporate clients needing to restructure their energy procurement arrangements to manage cost exposure through PPAs (power purchase agreements) and demand flexibility contracts. Ofgem's five-year charging period locks in regulatory certainty but removes optionality, meaning clients that have not locked in supply arrangements now face elevated and predictable costs — a commercial pressure that accelerates deal flow for energy transactions practices. The simultaneous increase in the CCL (Climate Change Levy) rate compounds the incentive for corporates to invest in renewable self-supply, driving planning and grid connection advisory work. For City firms with energy and infrastructure practices, the regulatory reset is a sustained source of transactional and advisory mandates through 2031.
On the Ground
A trainee in an energy team would prepare summaries of the new TNUoS charging band conditions and their implications for specific client energy contracts, coordinate regulatory filing documentation for grid connection agreements, and review existing PPA schedules to identify any provisions triggered by regulatory charge changes. Drafting licence condition summaries for clients navigating the RIIO-T3 framework is a core deliverable.
Interview prep
Soundbite
Five-year RIIO-T3 network charge lock-in drives PPA structuring demand — corporate energy lawyers are fully activated by the April reset.
Question you might get
“How would you advise a manufacturing client on structuring a power purchase agreement to mitigate exposure to rising UK network charges under the RIIO-T3 price control period?”
Full answer
New UK electricity network charging arrangements took effect on 1 April 2026 under Ofgem's RIIO-T3 price control, raising TNUoS and CCL costs for commercial and industrial users for a five-year period. The legal consequence is immediate: energy-intensive clients are accelerating their review of power purchase agreements and on-site generation strategies to manage cost exposure. For energy and infrastructure practices at City firms, the regulatory reset is a sustained mandate driver, combining transactional PPA work with regulatory advisory on grid connection and licence compliance. The broader structural context is the UK's net-zero transition: as network charges rise to fund grid investment, the economics of corporate renewable procurement improve, further accelerating deal flow.
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