The National Grid Electricity System Operator (ESO) recently issued its summer update on the forecast Transmission Network Use of System (TNUoS) tariffs for 2025/26. Released on July 31, the update shows a slight decrease in the anticipated tariff levels compared to initial estimates made in April.
Key Points from the Updated Forecast
The revised forecast reveals a minor overall reduction in the estimated tariffs. This decrease is due to a 1.1% reduction in the revenue required from demand users of the system. Additionally, adjustments in the expected number of sites have influenced variations in the anticipated tariff levels across different regions.
Changes in Average Tariffs
Half-Hourly (HH) and Non-Half-Hourly (NHH) Tariffs
The ESO's updated forecast indicates a decrease in both half-hourly (HH) and non-half-hourly (NHH) average tariffs:
Half-Hourly (HH) Gross Tariff: The average HH gross tariff forecast has been lowered by £1.13/kW, now standing at £6.64/kW.
Non-Half-Hourly (NHH) Tariff: The average NHH tariff is forecasted to drop by 0.07p/kWh, resulting in a new rate of 0.30p/kWh.
Regional Variations
The forecasted tariff changes exhibit significant regional variations, primarily driven by changes in expected electricity generation levels in different areas:
South West Region: The April forecast projected a 42% year-on-year increase in HH tariffs for the South West. However, the updated forecast now predicts a 50% reduction, attributed to the expected addition of 2GW of generation capacity in the region.
South Wales: In contrast, South Wales, initially expecting a reduction in tariffs, is now facing a 56% increase due to an anticipated decrease of 0.5GW in generation capacity.
Impact on Low Voltage Site Specific (LVSS) Customers
For a representative Low Voltage Site Specific (LVSS) Residual Band 2 customer, characterised by an average demand of 22kW over the triad periods, the updated forecast indicates an annual tariff ranging between £2,548 and £2,714. This range represents a slight decrease from April’s forecast, which projected tariffs between £2,584 and £2,840.
Despite this reduction, forecasted tariffs for 2025/26 are still significantly higher than those for 2024/25. On average, across various regions, a typical LVSS customer can expect a 30.4% increase in tariffs. While this is an improvement over the April forecast, which anticipated a 32.6% increase, it still represents a considerable rise in costs.
Looking Ahead
This summer update is the second forecast for the upcoming charging year. The ESO plans to publish draft tariffs in November, followed by the final tariffs for the 2025/26 charging year in January 2025. These subsequent updates will provide more definitive insights into the tariff levels consumers can expect.
As we approach these critical publications, stakeholders must stay informed about TNUoS tariff developments. While the slight decrease in the forecasted tariffs is a positive sign, the overall increase compared to the previous year remains a concern for many.
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The ESO's summer update on TNUoS tariffs for 2025/26 provides a mixed outlook. While there is a slight overall decrease in the forecasted tariffs, regional variations and the significant year-on-year increase remain critical factors for consumers and businesses to consider. Keeping abreast of these developments will be crucial as the ESO moves toward finalising the tariffs for the upcoming charging year.