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.

Contact Us for help with your energy bills

Falling Wholesale Prices: The Time to Renew

10 December 2025
Ever since the Summer of 2021, energy prices have been above their historical levels. Whilst the initial spike created by the Russia/Ukraine conflict was short-lived, prices never fully returned to their pre-conflict levels. More recently, the first quarter of 2024 saw some reprieve as wholesale prices dropped, but prices rose by over 150% between February of 2024 and February 2025.

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The Ever-Increasing Standing Charge

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October 2025 Review

3 November 2025
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The British Industry Supercharger

30 October 2025
With government-imposed charges making up an increasing percentage of business energy bills, it is becoming difficult for many UK industries to remain competitive in international markets. This led to the introduction of the British Industry Supercharger (BIS). A scheme for energy-intensive businesses that aims to counteract many of the government-imposed environmental levies and the rising transmission charges. In this article, we cover how it works and what your business needs to know to benefit from it. What is the British Industry Supercharger? Launched on the 1st April 2024, the British Industry Supercharger is a strategic package of relief measures aimed at energy‐intensive industries (EIIs) such as steel, metals, chemicals, cement, glass and paper. The aim is to reduce electricity non‐commodity costs so UK foundational industries can compete with businesses in nations with lower energy costs. The BIS is comprised of 3 sections: 1. Relief from Renewable Levies This provides businesses with exemptions from paying Renewables Obligation (RO), Feed-in Tariff (FiT), and Contracts for Difference (CfD). These charges were added to invoices in order to fund green-power generation. Under the Supercharger, eligible EIIs can receive up to 100% exemption from these charges. 2. Network Charging Cost Compensation This offers discounts on electricity network charges - including Transmission Network Use of System (TNUoS) and Distribution Use of System (DUoS) fees. These fees cover the cost of maintaining the national grid and distribution networks, but can represent a large proportion of industrial energy bills. The BIS introduces a Network Charging Compensation (NCC) mechanism, reimbursing eligible firms for around 60% of these costs. 3. Capacity Market Exemption The scheme offers eligible business a full exemption from Capacity Market charges. The Capacity Market is funded through indirect charges on electricity bills with the aim of funding generators to ensure they are available during supply-peaks.

Why UK Energy Prices Keep On Rising…

21 October 2025
Why UK Energy Prices Keep On Rising… And what it means to manufacturing and engineering companies over the next few years Over the past decade, UK energy prices have changed dramatically. Not only in terms of overall cost but also in how those costs are made up. Ten years ago, the largest part of a business electricity bill came from the commodity element: the wholesale price of electricity. Non-commodity charges -- often used to support the infrastructure of the electricity grid or government energy policies -- were relatively modest. In 2013, the typical breakdown of electricity costs for a business user was around 60–65% commodity and 35–40% non-commodity. Today, that picture has flipped. For many manufacturers, non-commodity charges now make up over 60% of the total bill, with the non-commodity percentage of the bill increasing each year. This shift explains why energy bills have remained stubbornly high, even during periods when wholesale prices fell. Grid reinforcement, renewable subsidies, and balancing costs have grown year on year, with these costs baked into every unit of power consumed, regardless of wholesale prices.

What happens when a supplier fails?

14 October 2025
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MHHS: Market-Wide Half-Hourly Settlements

6 October 2025
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September 2025 Review

1 October 2025
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