What is DUoS on a business electricity bill?

DUoS stands for Distribution Use of System. It is a charge that helps pay for the local electricity distribution network that delivers electricity to homes and businesses.

For businesses, DUoS matters because it is one of the network charges included in business electricity prices. It can affect the unit rate, standing charge, capacity charges and pass-through costs on a commercial electricity contract.

The short answer is: DUoS is the cost of using the local electricity network between the national transmission system and your business premises.

Summary answer

Question	Answer
What does DUoS stand for?	Distribution Use of System
What does DUoS pay for?	Local electricity cables, substations, transformers and distribution network maintenance
Is DUoS an electricity or gas charge?	Electricity only
Is DUoS the same as TNUoS?	No. TNUoS covers the national high-voltage transmission system; DUoS covers local distribution networks
Who charges DUoS?	Distribution Network Operators charge suppliers, and suppliers recover the cost from customers
Can DUoS appear separately on a bill?	Yes, especially for larger or half-hourly metered businesses
Do small businesses pay DUoS?	Yes, but it is usually bundled into the unit rate or standing charge
Can businesses avoid DUoS completely?	Usually no, but they may reduce exposure by using less grid electricity, reducing peak demand or changing usage patterns

What does DUoS pay for?

DUoS pays for the local electricity distribution network. This is the infrastructure that takes electricity from the wider grid and delivers it to individual premises.

It helps pay for:

• local electricity cables
• substations
• transformers
• network maintenance
• fault repair and resilience
• distribution network upgrades
• local reinforcement for new demand
• network operation and administration
• investment needed for electrification, EV charging, heat pumps and business growth

National Grid Electricity Distribution says DUoS charges cover its costs of maintaining the distribution networks that supply electricity. Ofgem also explains that network companies charge suppliers an Ofgem-regulated price for using energy networks, with the money used for maintaining, running and upgrading those networks.

DUoS versus TNUoS

DUoS is often mentioned alongside TNUoS, but they are not the same thing.

Charge	Full name	What it covers	Simple comparison
TNUoS	Transmission Network Use of System	The national high-voltage transmission system	Electricity motorways
DUoS	Distribution Use of System	Local and regional electricity networks	Local roads
BSUoS	Balancing Services Use of System	Real-time system balancing	Traffic control

A simple way to understand it is this: TNUoS pays for moving electricity around Great Britain at high voltage, while DUoS pays for the local network that gets electricity to your premises.

NESO explains that TNUoS charges recover the cost of installing and maintaining the transmission system, while BSUoS recovers the day-to-day cost of operating the transmission system. DUoS is separate from those transmission charges because it relates to local distribution networks rather than the national transmission system.

Why DUoS affects business electricity bills

DUoS affects business electricity bills because the cost is recovered from electricity customers. Your supplier pays network charges and then includes those costs in the price it charges you.

Depending on your contract, DUoS may appear as:

How DUoS may appear	What it means
Included in the unit rate	The supplier builds DUoS into your p/kWh electricity price
Included in the standing charge	Some fixed distribution costs are recovered through a daily charge
Shown as a separate pass-through item	Larger businesses may see DUoS itemised
Included in capacity charges	Larger sites may pay charges linked to agreed supply capacity
Reconciled later	Some contracts adjust DUoS costs after actual charges are known

For many SMEs, DUoS is invisible. A small shop, café, office or salon may never see the term on a bill, but the charge is still part of the electricity price.

Why DUoS is a non-commodity charge

DUoS is a non-commodity charge. This means it is not the wholesale cost of the electricity itself.

A business electricity bill is usually made up of:

Bill component	What it means
Wholesale electricity	The cost of buying the electricity
Network charges	TNUoS and DUoS
Balancing charges	BSUoS and related system costs
Policy costs	RO, FiT, CfD, Capacity Market and other schemes
Supplier costs	Billing, admin, customer service and margin
Broker costs	Commission or fees, where applicable
Taxes	VAT and Climate Change Levy

This distinction matters because DUoS can rise or fall independently of wholesale electricity prices. A business might hear that wholesale power prices have softened, but still receive a higher bill because network, policy or balancing costs have increased.

Ofgem says network costs vary year to year, including to reflect usage and how costs need to be allocated across different parts of the network.

Who sets DUoS charges?

DUoS charges are set by Distribution Network Operators, often called DNOs. These are the companies responsible for operating the regional electricity distribution networks.

Your business does not usually choose its DNO. It depends on where the premises are located. You can choose your electricity supplier, but the local network operator is determined by region.

This is why DUoS can vary across the country. A business in London, Scotland, Wales, the Midlands, Yorkshire or the South West may face different distribution network charges, even if its electricity use is similar.

Why DUoS varies by region

DUoS varies because local distribution networks have different costs. Some areas need more investment, some have more rural networks, some have more urban demand, and some face different pressures from new connections, EV charging, renewable generation and electrification.

Factor	Why it affects DUoS
Region	Each distribution area has different network costs
Voltage level	Larger sites connected at higher voltages may be charged differently
Meter type	Half-hourly and non-half-hourly sites can be treated differently
Time of use	Some DUoS charges vary by red, amber and green time bands
Agreed capacity	Larger sites may pay capacity-related charges
Consumption profile	When a business uses electricity can affect charges
Network investment	Reinforcement and maintenance costs vary by region

This means two businesses using 100,000kWh per year may not have identical network cost exposure.

Red, amber and green DUoS time bands

For some business electricity users, DUoS unit charges are linked to time bands. These are often described as red, amber and green periods.

Band	Typical meaning	Cost level
Red	Peak demand periods	Highest
Amber	Mid-demand periods	Medium
Green	Lower-demand periods, often nights and weekends	Lowest

The exact time bands vary by distribution region and tariff type. Supplier guidance commonly describes red periods as weekday peak periods, with green periods generally linked to lower-demand times such as late evenings, nights and weekends. (Shell Energy UK)

For businesses with flexible electricity use, this can matter. Moving energy-intensive activity away from high-cost periods can sometimes reduce DUoS exposure, although this depends on the tariff and whether the supplier passes these signals through clearly.

Example: why DUoS time bands matter

A business uses 10,000kWh per month.

Usage pattern	Red band use	Amber band use	Green band use	Likely DUoS impact
Office-heavy daytime use	Low	High	Low	Medium
Restaurant evening peak	High	Medium	Low	Higher
Cold storage 24/7	Medium	Medium	High	Mixed
Warehouse with night operations	Low	Medium	High	Lower
Factory shifting load overnight	Low	Medium	High	Potentially lower

This is illustrative. The actual saving depends on the business’s meter, region, supply contract and how the supplier applies DUoS charges.

DUoS and standing charges

DUoS can affect business standing charges because some distribution network costs are fixed or capacity-related rather than purely linked to electricity consumption.

This is why a business can reduce its kWh usage but still have a high bill. If the daily standing charge, fixed network charges or capacity charges are high, cutting usage does not remove all costs.

Situation	Why DUoS may still matter
Business uses little electricity	Fixed daily charges still apply
Business has large supply capacity	Capacity-related charges may remain high
Business has reduced opening hours	Standing charges continue every day
Business has moved to more efficient equipment	Unit costs fall, but fixed costs remain
Business is on a pass-through contract	DUoS changes may be passed through separately

Low-usage businesses should compare the total annual cost of a contract, not just the unit rate.

DUoS and agreed supply capacity

Larger businesses may have an agreed supply capacity, usually measured in kVA. This is the level of electricity capacity reserved for the site.

If a business has more capacity than it needs, it may be paying unnecessarily high capacity-related charges. If it has too little capacity, it may face excess capacity charges or operational problems.

Businesses where this can matter include:

• manufacturers
• warehouses
• cold stores
• hotels
• leisure centres
• farms
• care homes
• large offices
• food production sites
• EV charging depots
• multi-site retail operations

A capacity review can sometimes reduce costs, but it should be handled carefully. Reducing capacity too far can create extra charges or limit future expansion.

DUoS and half-hourly meters

DUoS is often more visible for businesses with half-hourly meters. These meters record electricity use every 30 minutes, which allows suppliers and network operators to understand when electricity is being used.

Half-hourly data can affect DUoS because distribution costs are partly related to demand on the local network.

Business type	DUoS relevance
Non-half-hourly SME	Usually bundled into the tariff
Half-hourly metered business	More likely to see detailed network-cost exposure
Large half-hourly user	DUoS can be a significant cost item
Flexible or pass-through contract customer	DUoS may be itemised or reconciled
Multi-site business	DUoS can vary site by site and region by region

Businesses with half-hourly meters should review usage patterns, peak demand and whether flexible load can be moved away from expensive periods.

DUoS and pass-through contracts

DUoS is especially important in pass-through business energy contracts.

In a fully fixed contract, the supplier usually estimates DUoS costs and builds them into the agreed price. In a pass-through contract, the supplier may pass actual DUoS charges directly to the business.

Contract type	How DUoS may be handled
Fully fixed	DUoS usually included in agreed pricing
Fixed with exclusions	DUoS may still be adjustable
Pass-through	DUoS may be charged at actual cost
Flexible procurement	DUoS may be forecast, itemised or reconciled

A pass-through contract may look cheaper at first, but the final bill can rise if DUoS charges increase. Businesses should ask suppliers whether DUoS is fixed, forecast, passed through or reconciled.

DUoS and business electricity renewals

DUoS can affect renewal quotes because suppliers need to forecast network charges for the contract period.

A supplier quote may rise because of:

• higher distribution network charges
• higher standing charges
• higher capacity-related costs
• regional DUoS changes
• revised supplier forecasts
• meter or profile changes
• pass-through risk
• wider non-commodity cost increases

This is one reason businesses should avoid comparing renewal offers using only the headline unit rate. The standing charge and non-commodity treatment can be just as important.

Worked example: DUoS unit-rate increase

A business uses 100,000kWh of electricity per year.

DUoS-related increase	Extra annual cost
0.25p/kWh	£250
0.5p/kWh	£500
1p/kWh	£1,000
1.5p/kWh	£1,500
2p/kWh	£2,000

This is a simplified example. Actual DUoS costs depend on region, usage time, meter type, capacity and contract structure.

Worked example: DUoS and time shifting

A business uses 20,000kWh per month. It can move 2,000kWh of flexible consumption from a high-cost red period to a lower-cost green period.

Shifted usage	Illustrative DUoS saving	Monthly saving	Annual saving
2,000kWh/month	2p/kWh	£40	£480
2,000kWh/month	4p/kWh	£80	£960
2,000kWh/month	6p/kWh	£120	£1,440

These figures are illustrative. The actual saving depends on the DUoS tariff, DNO area, supplier pass-through terms and whether the business is billed on time-based DUoS charges.

Which businesses are most affected by DUoS?

DUoS can affect any electricity customer, but it is most important for businesses that use a lot of electricity, have high peak demand or operate at expensive times.

Business type	Why DUoS matters
Manufacturer	High usage and machinery loads
Cold storage business	Continuous refrigeration demand
Warehouse	Lighting, automation, HVAC and EV charging
Hotel	Lifts, kitchens, laundry, lighting and HVAC
Care home	24/7 operation and high electricity dependency
Restaurant	Peak evening demand and kitchen equipment
Leisure centre	Pools, gyms, changing rooms and HVAC
Supermarket or food retail	Refrigeration and lighting
EV fleet depot	High charging demand
Multi-site retailer	Small changes multiplied across many sites

For a very small office, DUoS may be a hidden part of the bill. For a large half-hourly site, it can be a meaningful cost-management issue.

Can businesses reduce DUoS charges?

Businesses usually cannot avoid DUoS completely, but they can sometimes reduce their exposure.

Action	How it may help
Reduce total electricity use	Lowers usage-linked charges
Shift flexible demand	Moves consumption away from expensive periods
Review agreed capacity	May reduce capacity-related charges
Avoid excess capacity	Prevents penalties or higher charges
Use half-hourly data	Identifies high-cost usage patterns
Install solar panels	Reduces imported grid electricity
Install battery storage	Helps reduce peak import and improve solar self-consumption
Improve power factor	Can reduce reactive power-related costs for some sites
Compare contract structures	Helps choose between fixed and pass-through exposure
Check meter details	Prevents incorrect charging based on wrong data

The best approach depends on the site. A restaurant may have limited ability to shift evening demand. A warehouse, factory or EV depot may have more flexibility.

Solar panels and DUoS

Commercial solar panels can reduce DUoS exposure because they reduce the amount of electricity imported from the grid.

However, solar does not remove all DUoS-related costs. A business may still pay standing charges, capacity charges and network costs when it imports electricity from the grid.

Solar is most useful where a business has:

• high daytime electricity consumption
• suitable roof space or land
• long-term site occupancy
• high grid electricity prices
• limited shading
• good alignment between solar generation and business demand

Adding battery storage can improve the benefit by storing surplus solar power and reducing peak import from the grid.

DUoS and EV charging

Businesses installing EV chargers should pay attention to DUoS because charging can increase both total electricity use and peak demand.

This is especially relevant for:

• depot charging
• delivery fleets
• taxi fleets
• workplace charging
• logistics sites
• retail car parks
• hotels with guest charging
• motorway or destination charging sites

If many vehicles charge at the same time, the business may increase its local network impact. Smart charging, load management and batteries can help reduce peak demand.

DUoS and business energy bills in 2026

DUoS is part of a wider shift in business electricity bills. Network costs, policy costs and other non-commodity charges now make up a large part of the final price businesses pay.

Ofgem’s DUoS Significant Code Review update says distribution network charges are being considered as part of wider reforms because the use of the electricity distribution network is changing rapidly in the run-up to Clean Power 2030 and the future electricity system.

This matters because local networks will need to support more:

• EV charging
• heat pumps
• solar panels
• battery storage
• data centres
• electrified industrial processes
• local flexibility services
• new homes and business connections

As the distribution network changes, DUoS charging is likely to remain an important issue for business electricity customers.

Questions to ask your supplier about DUoS

Before signing a business electricity contract, ask:

Question	Why it matters
Is DUoS included in the unit rate?	Shows whether the quote is bundled
Is DUoS included in the standing charge?	Helps explain fixed daily costs
Is DUoS fixed or passed through?	Identifies future price risk
Can DUoS be reconciled later?	Warns of possible catch-up charges
Which DNO region applies to my site?	DUoS varies by region
Are red, amber and green time bands relevant?	Useful for half-hourly or time-based billing
Is agreed supply capacity correct?	Avoids paying for unnecessary capacity
Are excess capacity charges possible?	Helps avoid avoidable penalties
Can I see the total annual cost?	Better than comparing p/kWh alone
Is broker commission included?	Prevents misleading quote comparisons

How to check whether DUoS is affecting your bill

Look at:

Bill or contract item	What to check
Standing charge	Has the daily fixed cost increased?
Unit rate	Has the p/kWh price risen at renewal?
Contract notes	Are network charges excluded or passed through?
DUoS line item	Is DUoS shown separately?
Capacity charge	Is the site paying for agreed supply capacity?
Excess capacity charge	Has the site exceeded its agreed capacity?
Reactive power charge	Is poor power factor increasing costs?
Meter type	Is the site half-hourly, non-half-hourly, LV or HV?
DNO region	Is the correct distribution area being used?
Consumption pattern	Is usage concentrated in expensive periods?

If your bill increased after a renewal or contract change, DUoS should be checked alongside TNUoS, BSUoS, standing charges and policy costs.

Final verdict

DUoS is the Distribution Use of System charge. It helps pay for the local electricity distribution network that delivers power to business premises.

It matters because it is part of the non-commodity cost stack on business electricity bills. Small businesses often pay DUoS without seeing it listed separately, because suppliers bundle it into the unit rate or standing charge. Larger businesses, half-hourly sites and pass-through contract customers may see DUoS more directly.

DUoS can vary by region, meter type, voltage level, capacity and time of use. Businesses with high electricity consumption, high peak demand or flexible loads should pay particular attention to it.

Most businesses cannot avoid DUoS entirely, but they may reduce exposure by cutting electricity use, shifting demand away from peak periods, reviewing agreed capacity, installing solar panels or batteries, and checking whether their contract fixes or passes through network charges.

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