Initial 2027 transmission tariff forecasts suggest 23% increase for most businesses

The vast majority of TNUoS costs for energy consumers are comprised of the fixed tariff component. This varies by user type and residual band, with larger consumers paying more. The following graph summarises the annual 2027 forecast fixed cost by user type and the increase compared to 2026-27 tariffs.

Source: NESO 2027 initial forecast and Drax Energy Solutions analysis

While NESO forecasts domestic and low voltage no Maximum Import Capacity band 1 (LVN1) consumers to see a 16% and 10% increase respectively, it anticipates other businesses will see a greater increase. It anticipates the greatest increase to be for LVN3 consumers (28%), while most sites will see increases of between a 23.14% and 23.79%.

The overall increase in charges is due to a £1.5bn (20%) rise in forecast total TNUoS revenues year-on-year. Once NESO accounts for generation tariff recovery, this translates into a £1.32bn uplift in demand residual charges, or 21% y-o-y. The variation between consumer type is due to updated consumption data that NESO has used in the forecast.

The increases are significant and build upon the substantial average 64% increase in tariffs consumers experienced in April 2026. However, NESO notes that the demand residual costs are overall lower than forecast in last year’s 5-year view.

Locational demand tariffs

The locational element of demand tariffs varies depending on whether the consumer is half-hourly (HH) or non-half hourly (NHH) settled, although typically comprises a small element of the total cost.

Source: NESO 2027 initial forecast and Drax Energy Solutions analysis

HH charges are levied over the so-called triad periods, whereas NHH tariffs are levied over peak (4-7pm) consumption year-round. The forecasts for all regions with a non-zero locational tariff have increased, and NESO anticipates the East Midlands region will shift from no locational tariff to a small tariff in 2027 for both HH and NHH tariffs. NESO presently forecasts regions north of the Midlands will have no locational demand tariff in 2027. The movement in tariffs is due to changes in nodal demand and embedded generation forecasts, along with likely greater demand in the south of the country.

Next steps

In September 2026, NESO will publish its Five-Year View of 2027-28 – 2031-32 tariffs and projection of additional years.

It will confirm final tariffs for 2027-28 in January 2027.

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