Understanding your Energy Bill

Craig Watson • 3 March 2023

Understanding Your Energy Bill

At SeeMore Energy, our aim is to educate clients on all energy charges for both Electricity and Gas, with the aim of helping them gain greater understanding on all the costs associated within their energy bill.


For the first in a 8-part series of ‘Understanding your Energy Bill’ we focus on the Standing Charge.


Standing Charge

What is a Standing Charge?

Standing charges are a fixed daily charge and they appear on both gas and electricity bills. They will be charged a set rate independent of how much energy the meter uses, although the estimated annual consumption is a driver when suppliers set the fixed rate for all their respective tariffs.


In theory the standing charge is there to provide a minimum level of cost recovery for suppliers to cover their overheads for services mainly focused around ensuring consistency of supply to the meter, as well as general maintenance and upkeep of the distribution and transportation networks.


As a result, the main driver of Standing Charge costs alongside the usage will be the region. More remote locations can usually incur higher costs compared to meters located in more densely populated areas.


Why have Standing Charges increased recently?

Over the last 18 months there has been a significant increase in Standing Charges and there are 3 main reasons for this:


1. Failed Suppliers


From January 2021-February 2022 there were 31 energy companies who ceased trading in the UK market. In addition to the 2 million customers affected by these companies Bulb Energy were placed into special administration leaving over 1.5 million other customers in need of being transferred to other suppliers.


A combination of the Ofgem price cap and rapidly rising wholesale prices left many suppliers unable to sell energy at a price that was greater than their costs.

 

While existing suppliers inherit the clients of the failed companies they also inherit their network costs.


2. Covid Recovery


During the UK's Covid-19 Pandemic, a significant amount of forecast energy usage when unused with many businesses forced to undertake remote working policies or in extreme circumstances such as hospitality industries, close their doors completely.


This sustained period of under-usage will have left suppliers with sizeable losses by not being all to bill customers for unused kWh usage.


3. Increase in renewable energy sources


The UK’s network of energy transmission has historically worked by transporting energy from a few large power stations to their target destinations. This production would be ramped up during peak hours. With the rise of renewable energy sources, more specialist equipment has been needed to connect these supplies to the grid and there is less consistency in knowing exactly how much electricity can be produced at specific times.


Can Standing Charges change mid-contract?

While it is normally true that the Standing Charge agreed upon at the start of a new contract will be valid for the duration of the contract, there is a circumstance where it can be changed. If the Estimated Annual Consumption is significantly more or less than actual consumption, then suppliers can change the Standing Charge. Large users pay higher standing charges so if a meter was initially thought to be a smaller consumer, but it turned out to actually be high consumer, then the Standing Charge can be changed if the suppliers terms and conditions allow the right to do so.


This can be more common within Gas meters where monthly consumption figures are reported by Transo to energy suppliers.


What can be done about high Standing Charges?

While there is not much that can be done once a contract is in place, it is always prudent to shop around and see which tariffs are available when you are in the period to negotiate a new contract. It can seem daunting to get a quote from every supplier in the market, but one way to ensure you are getting a good deal is to use a trusted broker with knowledge of the markets.

 

Acting on your behalf the broker can first ensure there’s a balance of quotes with varying standing charges as when the approach the market, but also ensure there’s full understanding on how the unit rates balance off against the standing charge, as the cheapest standing charge can often mean a higher unit rate, which may mean a more expensive cost overall.


At SeeMore Energy, we can provide a review of your current contract to ensure you’re paying a Standing Charge reflective of the energy used and if there’s anything further to challenge, we can work with the suppliers to ensure costs are minimised where possible.

To speak to one of our team, please email admin@seemoreenergy.co.uk quoting ‘Standing Charge’ or use the contact form below.

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The British Industry Supercharger

30 October 2025
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What happens when a supplier fails?

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MHHS: Market-Wide Half-Hourly Settlements

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September Review By Adam Novakovic We have reached the time of year where the summer months have started to fade and we begin to think about the colder seasons. This month saw the UK government recognise Palestine as a country, although they still seem unable to recognise the harm their energy policies are causing UK businesses. With further charges set to be added to UK energy bills and rising non-commodity costs, it was a relief that wholesale energy prices remained fairly flat throughout September. A recent report from independent analysts Cornwall Insights revealed that large energy users who aren’t covered by Government schemes could find that they are paying a further £450,000/year in non-commodity costs by 2030. With non-commodity costs such as DUOS and TUOS charges –which are used to fund the infrastructure responsible for the transmission of electricity – now accounting for over 2/3rds of total electricity costs for some businesses, it is of growing concern that these charges are set to continue rising. With the TUOS charges for 26/27 expected to increase significantly , the non-commodity charges are starting to have a negative impact on UK businesses ability to compete against foreign businesses with fewer governmental charges on their energy bills. This growing concern is yet to be addressed but could have a huge impact on many industries in the next year.

RIIO - ET3 and increasing costs

25 September 2025
Following on from our previous article about rising TNuOS costs , we look at the reasons behind energy price rises, and which other items on your bill are likely to increase in the near future. What is RIIO – ET3? RIIO: “Revenue = Incentives + Innovation + Outputs” is Ofgem’s regulatory framework for setting how much network operators can recover from users while delivering value, efficiency and innovation. The current RIIO-2 period ends 31 March 2026, and RIIO-ET3 (also called RIIO-3) will run from 1 April 2026 through 31 March 2031.

How TNUoS costs are set to rise

17 September 2025
How TNUoS costs are set to rise As the UK pushes towards a low-carbon energy system, there has been a sharp rise in costs for businesses connected to the grid. The National Energy System Operator (NESO) has released its latest five-year outlook on Transmission Network Use of System (TNUoS) charges, and -- from April 2026 – energy costs will rise significantly to fund the country’s energy transition. What Are TNUoS Charges? NESO uses the funds from TNUoS charges to build, operate, and maintain the high-voltage transmission network across Britain. The forecasts for 2026/27 have indicated that NESO will be looking to almost double the revenue generated in the previous year. While suppliers pass these charges on to both households and businesses, the scale of the increases ahead will be most acutely felt by large energy users.

ESOS Phase 4: What Businesses Need to Know

8 September 2025
ESOS Phase 4: What Businesses Need to Know The Energy Savings Opportunity Scheme (ESOS) Phase 4 is underway, starting on 6 December 2023, with a compliance deadline of 5 December 2027 . UK businesses must understand ESOS Phase 4 eligibility , key changes, and deadlines to ensure compliance and avoid penalties. This guide covers everything you need to know about ESOS Phase 4 for UK businesses . Who needs to comply with ESOS Phase 4? The ESOS Phase 4 eligibility criteria remain consistent with Phase 3. Your organisation qualifies as a “large undertaking” if, on the qualification date of 31 December 2026 , it meets all of these requirements: Based and registered in the UK Employs 250 or more people Has an annual turnover above £44 million Has an annual balance sheet total over £38 million To confirm your ESOS Phase 4 eligibility , visit our site and answer the questions to see if your business should be participating. Even if you don’t currently meet these criteria, crossing the threshold by the qualification date means you must submit a compliance notification by the ESOS Phase 4 deadline of 5 December 2027 . If your business qualified for Phase 3 but no longer meets the criteria, you must submit a “Do Not Qualify” (DNQ) notification via the Environment Agency’s MESOS portal. Key requirements for Phase 4 Phase 3 introduced the requirement for organisations to create an Action Plan that set out how you intend to cut energy use and when. That same principle continues in Phase 4, along with mandatory progress reporting in the years that follow. However, there are some updates to note: Action plan progress must now be included within your ESOS assessment. If commitments aren’t met, your business will need to explain why. Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are no longer valid routes to compliance. While net zero reporting will not yet be mandatory, you can choose to adopt the new PAS 51215 standards for voluntary energy and decarbonisation reporting. This could give your organisation a head start before net zero requirements arrive in Phase 5. These ESOS Phase 4 key changes ensure businesses focus on actionable energy efficiency measures and transparent reporting.

August 2025 Review

1 September 2025
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Nuclear Regulated Asset Base Levy

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