The government's Electricity Transmission Network Bill Discount Scheme may be a household benefit, but it's a business cost.
From late 2026, all licensed electricity suppliers will be under a legal obligation to fund the new scheme, and they are expected to recover that cost from all their domestic and non-domestic customers through a new charge on bills. For UK businesses, that means a new non-commodity cost (also known as a third-party cost) line sitting alongside existing policy costs like the Renewables Obligation (RO), Contracts for Difference (CfD) and Capacity Market.
Please note: this article reflects the scheme's design as published to date. The underlying secondary legislation has not yet been laid before Parliament, so scope, timing and cost figures remain subject to change.
What does the Electricity Transmission Network Bill Discount Scheme do?
The scheme gives households living within 500 metres of new or significantly upgraded electricity transmission infrastructure, including pylons, overhead lines, substations, converter and switching stations, a discount of up to £250 a year on their electricity bill, for up to 10 years. This benefit is worth up to £2,500 in total per eligible householdi.
Britain needs roughly twice as much new transmission infrastructure built by 2030 as was built in the previous decade, largely to connect renewable generation and relieve network constraints. Community opposition to pylons and substations is one of the biggest sources of planning delay and if delays to critical transmission projects persist, network constraint costs – paid by all billpayers – are forecast to rise from around £1.7bn in 2024 to a peak of £8bn in 2030ii. So, the scheme is essentially designed to speed up grid build.
Ofgem was confirmed as scheme administrator in May of this year, before publishing a detailed scheme design update in July and the first list of expected eligible projects in August.
Why this is a business cost?
Businesses are excluded from receiving the discount, but not from paying for it. In fact, non-domestic consumers will fund ~62-63% of the total scheme cost. The government's own consultation plainly states that suppliers are "expected to recoup their costs by passing them onto their customers through their bills" and is explicit that funding it through both supplier types "spread[s] the cost over a larger number of billpayers," specifically to reduce the impact on domestic billsiii.
Each supplier's contribution is based on its share of total electricity volume supplied to the GB market, pulling large industrial and commercial consumption into the calculation.
What it's likely to cost and when
This policy cost is estimated to be £0.07 - £0.09/MWh in the first policy year (2027) before rising to peak impact – roughly £0.12-£0.15/MWh – in 2029iv.
Whilst the costs to businesses are likely to be small, it is a new cost line, and it's arriving at a time when the non-commodity portion of business energy bills is already growing, so it's worth tracking cumulatively alongside other rising policy costs when modelling future cost-to-serve or total energy spend.
Energy Intensive Industries (EIIs) with a valid exemption certificate will be excluded from contributing, consistent with how they're treated for other policy costs.
What businesses should be doing now
Flag this as a forthcoming non-commodity cost addition when budgeting or benchmarking contracts from 2027 onward. It will likely appear via supplier pass-through rather than a separate invoice line, similar to how RO and CfD costs are typically bundled.
EII-certified clients should check that their exemption is properly reflected once the scheme goes live and supplier billing changes take effect.
Finally, for any businesses located near proposed transmission projects, it is advisable to check DESNZ's published list of expected eligible projects (updated periodically) to understand whether nearby infrastructure could affect local planning, even though the business itself won't be eligible for the discount.
This scheme is a small piece of a much larger direction of travel: policy costs increasingly earmarked to unlock faster, cleaner grid infrastructure, funded broadly across all electricity consumers rather than narrowly targeted. For clients building out renewable PPAs, flexible supply arrangements or multi-site portfolios, the pattern is one more reason to have a genuinely informed, forward-looking supply partner.
Evolve Energy is a UK independent energy supplier specialising in renewable energy supply and flexible business energy contracts for industrial and commercial (I&C) customers.
