Latest news: CCL to rise and BSUoS timetables to alter

CCL to rise with RPI in 2026

The Autumn Budget was relatively light on energy-related news. However, tucked away in the document itself was the following sentence. “The main rates of the Climate Change Levy (CCL) for gas, electricity, and solid fuels will be uprated in line with Retail Price Index (RPI) in 2026-27”.

Since 1 April 2021, the CCL rates for electricity have been frozen at £7.75/MWh. Simultaneously, gas CCL rates have increased substantially year-on-year to align with the electricity rate. This year, the two rates achieved parity for the first time. The news means that from 1 April 2026, both gas and electricity CCL rates will increase; the exact value will depend on inflation.

For any organisation with a Climate Change Agreement (CCA), the reduced rates of CCL will remain at an unchanged fixed percentage of the main rates (up to 92%). This provides certainty for customers using CCAs; the government confirmed it’s extending the scheme a further six years, to March 2033.

CCAs provide organisations a discounted rate to the CCL in exchange for meeting agreed reductions in energy use or COշ emissions. The baseline year for the new scheme is 2022.

Balancing costs timetables to alter from April 2026

Ofgem approved two code modifications on 30 October:

(i) CMP408 Allowing consideration of a different notice period for BSUoS tariff settings
(ii) CMP415 Amending the Fixed Price Period from 6 to 12 months

These both alter the notice period and duration of the fixed price Balancing Services Use of System (BSUoS) timetable.

CMP408 will reduce the notice period for setting BSUoS tariffs from nine months to three months. Ofgem believes this will improve the accuracy and stability of BSUoS forecasts, and minimise the need for within-period resets.

CMP415 will amend the fixed price period from six months to 12 months. However, two seasonal fixed tariffs will be set – a summer rate (Apr-Sep) and a winter rate (Oct-Mar). The regulator believes this will result in a more stable pricing environment, reduce risk premia, and align BSUoS tariff setting with industry practice.

The current methodology for setting BSUoS tariffs will continue to apply until April 2025, which means they will be fixed to 31 March 2026.

In December 2025, the National Energy System Operator (NESO) will publish the first seasonal tariffs under the new arrangements, to apply from April 2026. It will publish tariffs every December thereafter, to apply from the following April.

Ofgem noted that future market developments could introduce significant levels of uncertainty, such as those industry experienced in 2022. The regulator will be open to new Connection and Use of System Code (CUSC) modification proposals in such instances, and would evaluate them based on their merits.