Energy scaleup warns of "broken" system as suppliers pass hidden costs onto firms
LONDON, April 13, 2026 /PRNewswire/ -- UK businesses have been hit with a 60% spike in TNUoS (Transmission Network Use of System) charges, exposing what energy transactions scaleup tem calls a "system-wide failure" in how non-commodity costs are handled.
In response, tem has covered the £7m in additional costs many of its customers would have had to swallow, after many suppliers moved to pass the increase directly onto businesses - often without warning.
TNUoS - a standing charge on every business electricity bill that funds upgrades to the UK's transmission grid - rose sharply from 1 April 2026, following a decision by the National Energy System Operator (NESO). The change will see electricity bills rise sharply, with tem customers set to pay tens of thousands more every year were it not for the company's intervention. The charges reflect mounting pressure on grid infrastructure, driven by years of underinvestment and the rapid expansion of renewable energy.
Instead of pricing that risk upfront, many suppliers are now invoking passthrough clauses, issuing bills far higher than businesses expected when signing contracts. For sectors operating on tight margins - including manufacturing, hospitality, retail and care - the impact is immediate and unplanned.
Why this matters:
TNUoS is one of several non-commodity costs (NCCs) - alongside levies and network charges - that now make up 50-60% of a typical business energy bill.
Crucially, these costs:
- Are set externally, not by suppliers
- Change annually, often with minimal notice
- Are inconsistently disclosed across contracts
There is no standardised approach to how NCCs are priced or communicated. Some suppliers bundle them into unit rates. Others list them separately - but reserve the right to change them after contracts are signed. The result is that businesses cannot accurately compare contracts, forecast costs, or protect themselves from mid-contract price shocks.
The £7m tem has covered for customers reflects just one regulatory update to a single cost line - highlighting the scale of exposure across the market.
tem said the scale of the charge also shows how easily unpredictable non-commodity costs can damage newer suppliers and energy tech entrants, discouraging competition and making it harder for startups to improve the market.
The call for reform:
Joe McDonald, CEO and co-founder of tem, is calling on DESNZ and Ofgem to introduce urgent reforms:
- Publish six-month NCC forecasts with an enforceable +/-10% accuracy requirement
- Make grid operators financially responsible when costs exceed that threshold, creating stronger discipline around network spending under the current cost-plus model
- Standardise how fixed and passthrough costs are disclosed in energy contracts, so businesses can compare deals fairly and understand risks before they sign
McDonald said:
"Businesses should not be worrying about volatile non-commodity costs that ought to be planned, forecast and clearly disclosed. They need stability, certainty and transparency in the contracts they sign. More accurate forecasting and greater clarity around costs outside the control of market participants would benefit everyone - including the technology companies and new entrants trying to improve how the market functions. The network should work for everyone, not operate as an open cheque book for network operators to spend freely and send the bill to British businesses."
Notes to editors
Press contact: tem@wordsandpixels.co
About tem
tem is an AI-native energy transactions scaleup founded in 2021 by four energy experts who scaled and exited Limejump - Joe McDonald, Jason Stocks, Bartlomiej Szostek, and Ross Mackay. Having seen first-hand the inefficiencies and opacity of the old-world wholesale market, tem is replacing it with new-world technology that puts transparency, efficiency and affordability at the heart of every transaction. tem has already facilitated over 2TWh of energy transactions and serves 2,600+ customers, including Boohoo Group, BOXPARK, Fever-Tree and Silverstone Circuit, on 4,000+ sites across the UK. Ahead of this raise, tem is already backed by leading global investors including AlbionVC, Atomico, the Branson family office and Revent VC.
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