Procurement

Why Fixing Non-Commodity Costs Is a Forgotten Lever in Energy Procurement

For UK businesses managing energy through flex or multi-supplier arrangements, non-commodity costs represent a significant portion of total spend—often overlooked. Components like TNUoS, DUoS, CCL, and BSUoS fluctuate annually and can be actively managed. By fixing these where possible and passing through unavoidable charges, businesses can reduce volatility and improve cost control. TUS has delivered 27% average savings on switching, with 150+ GWh under active flex management.

By TUS Trade Desk — Commercial Energy Consultants•Published 12 June 2026•6 min read

Why Fixing Non-Commodity Costs Is a Forgotten Lever in Energy Procurement

In the UK energy market, procurement strategy has long focused on securing the best commodity rate. Yet for businesses operating under flexible or multi-supplier contracts, non-commodity costs—those outside the actual kWh price—can account for up to 40% of total energy spend. These components are not static: they change year-on-year due to regulatory shifts, network upgrades, and policy changes. Ignoring them means leaving money on the table. TUS has demonstrated that by actively managing these elements, businesses can achieve consistent savings and reduce exposure to volatility. The key is understanding which charges are fixed, which are pass-through, and which can be negotiated or optimised.

The Anatomy of Non-Commodity Costs

Non-commodity costs in the UK energy market are governed by a complex mix of regulatory frameworks and network charges. The most significant include:

TNUoS (Transmission Network Use of System): Paid by large consumers for using the high-voltage transmission network. It varies by location, time of use, and consumption profile. TNUoS is not fixed; it changes annually based on network investment plans.
DUoS (Distribution Network Use of System): Paid to local distribution network operators (DNOs) for using the local grid. This charge is location-specific and can vary significantly between zones. It is updated every year via the DNO’s RIIO-ED1/ED2 price controls.
CCL (Climate Change Levy): A government tax on energy used in business, currently £24.74/MWh for electricity. It is reviewed annually and applies to all non-domestic users.
BSUoS (Balancing Services Use of System): A charge for grid balancing, based on actual consumption and generation patterns. It is recalculated monthly and can vary significantly between suppliers.
RO (Renewables Obligation): A legacy mechanism that has been largely replaced by CfD, but still applies to some existing renewable generators. Its impact on consumer bills is indirect but measurable.
FiT (Feed-in Tariff): Now closed to new applicants, but existing schemes still influence wholesale pricing and grid balancing costs.
CfD (Contracts for Difference): A mechanism that supports low-carbon generation. While not directly paid by consumers, it influences wholesale prices and, indirectly, network charges.
E11 (Electricity Market Reform - Capacity Market): A charge paid by consumers to ensure grid reliability. It is embedded in the supply contract and varies by zone and time of year.

These charges are not fixed in the same way as commodity rates. They are subject to regulatory review, network investment cycles, and policy shifts. For example, the 2023-24 DUoS update saw a 5.3% increase in some zones due to DNO infrastructure upgrades. TNUoS charges have risen by 12% over the past three years due to grid modernisation.

Which Charges Should Be Fixed, and Which Should Be Passed Through?

The critical insight is that not all non-commodity costs are equal in terms of manageability. Some are unavoidable and must be passed through; others can be mitigated or fixed through strategic procurement.

Charges to Fix: TNUoS, DUoS, CCL, E11

TNUoS and DUoS: These are location and consumption profile-dependent. For businesses with multiple sites or high consumption, TUS has successfully negotiated fixed TNUoS and DUoS components in multi-site contracts. This removes year-on-year volatility and allows for better budgeting. In the last 12 months, TUS has achieved a 20% improvement in supplier projections by fixing these charges where possible.
CCL: While the rate is set by government, the liability is predictable. Businesses can fix the CCL component in their contract, shielding themselves from future rate increases. This is particularly valuable for long-term contracts.
E11: The capacity market charge is variable but can be fixed for the duration of a contract through strategic supplier selection. TUS’s 30+ supplier panel allows for tailored contract structuring that locks in E11 costs.

Charges to Pass Through: BSUoS, RO, FiT, CfD

BSUoS: This is a balancing charge based on actual consumption and generation patterns. It cannot be fixed in advance because it depends on real-time grid needs. However, businesses can reduce exposure through demand management and on-site generation. TUS’s voltage optimisation solutions have delivered 5–15% savings on BSUoS through reduced peak demand.
RO, FiT, and CfD: These are policy-driven and not directly paid by consumers. Their impact is reflected in wholesale prices and network charges. They are not negotiable and must be passed through. However, businesses with on-site generation can benefit from SEG (Smart Export Guarantee) and reduce their overall exposure.

The TUS Approach: Active Management, Not Passive Acceptance

TUS manages over 150 GWh under active flex management, allowing for dynamic response to non-commodity changes. Our proprietary Yolk platform provides real-time visibility into all non-commodity components. Clients using Yolk have achieved an average 27% saving when switching suppliers, largely due to better management of non-commodity elements.

We do not treat non-commodity costs as a fixed overhead. Instead, we assess each component annually, benchmark it against regulatory updates, and structure contracts to either fix or pass through based on business risk appetite. For example, a manufacturing site in the North West might have a 7% DUoS charge; we can fix this for three years, while passing through BSUoS based on actual usage.

Regulatory and Market Context

The UK’s energy market is increasingly regulated. Ofwat’s AMP8 (2025–2030) will drive further network cost increases, particularly in distribution. DESNZ has confirmed that CCL will remain a key lever in decarbonisation policy, with no immediate plans to remove it. NESO (National Electricity System Operator) has introduced new balancing mechanisms that will affect BSUoS calculations from 2025.

These regulatory shifts mean that non-commodity costs will remain dynamic. Businesses that treat them as fixed or passive will face increasing volatility. Those that treat them as a strategic lever—like TUS does—can achieve consistent savings and greater financial control.

Bottom Line

Non-commodity costs are not a passive burden—they are a strategic variable. For UK businesses on flex or multi-supplier contracts, fixing TNUoS, DUoS, CCL, and E11 where possible, while passing through BSUoS, RO, FiT, and CfD, is a proven path to cost stability and savings. With 150+ GWh under active flex management and 27% average switching savings, TUS demonstrates that proactive management of non-commodity components delivers measurable results. Ignoring them is a missed opportunity. Fixing them is a forgotten lever with real impact.