The UK’s energy system is moving through a major shift.

Electricity demand is rising fast, driven by electrification, renewable generation, and net zero targets. To keep up, the network needs serious investment. That’s where RIIO-3 comes in.

Set by Ofgem, RIIO-3 is the next price control framework running from 2026 to 2031. It’s designed to modernise the grid and improve long-term resilience.

But it also changes how businesses pay for electricity.

What Is RIIO-3 and Why It Matters

RIIO-3 will fund upgrades to the UK’s energy infrastructure. This includes:

• Connecting more renewable energy
• Increasing grid capacity
• Strengthening network resilience

These upgrades are essential. But they come at a cost.

That cost is passed through to businesses via network charges, and this is where the real shift happens.

A Move Towards Higher Fixed Costs

Under RIIO-3, more of the cost is being recovered through fixed daily standing charges rather than unit rates.

In simple terms:

• You pay more just to be connected
• Less of your bill depends on how much energy you use

This changes the way energy costs behave.

Historically, using less energy meant lower bills. Now, a larger share of your costs is fixed, whether you use energy or not.

Projected Daily Standing Charges for UK Businesses (£/day)

The table below shows projected DUoS standing charges across a range of customer bands and voltage levels over the RIIO-3 period:

Band	2026/27	2027/28	2028/29	2029/30	2030/31
Band 1	£0.31	£0.31	£0.37	£0.41	£0.45
Band 2	£0.74	£0.89	£1.05	£1.16	£1.28
Band 3	£1.60	£1.94	£2.28	£2.52	£2.78
Band 4	£4.41	£5.34	£6.29	£6.96	£7.66
LV1	£7.28	£8.61	£10.13	£11.19	£12.30
LV2	£14.41	£17.06	£20.06	£22.17	£24.37
LV3	£18.01	£21.33	£25.08	£27.71	£30.47
LV4	£48.23	£57.11	£67.15	£74.20	£81.58
HV1	£39.25	£46.71	£55.07	£60.93	£67.03
HV2	£146.54	£174.42	£205.62	£227.50	£250.27
HV3	£233.35	£276.71	£325.60	£359.90	£395.74
HV4	£667.80	£792.81	£933.43	£1,032.07	£1,135.03
EHV1	£387.51	£461.18	£543.66	£601.48	£661.69
EHV2	£1,394.46	£1,651.14	£1,941.44	£2,145.19	£2,358.41
EHV3	£2,897.17	£3,448.40	£4,065.29	£4,497.80	£4,948.07
EHV4	£6,598.39	£7,853.84	£9,258.80	£10,243.86	£11,269.37

What the Data Shows

Projected DUoS standing charges show a clear trend. Costs are rising across every band and voltage level between 2026 and 2031.

Small businesses (Bands 1 to 3)

• Lower daily charges overall
• But increases of 40 to 60 percent across the period
• A higher fixed baseline, even for low users

SMEs and commercial users (Low Voltage)

• Daily charges rising from around £7 to over £12 (LV1)
• And from around £14 to over £24 (LV2)
• This adds up to thousands per year in fixed costs

Large industrial users (HV and EHV)

• The biggest impact
• Daily charges reaching hundreds or even thousands of pounds
• Fixed network costs becoming a major operational expense

What This Means for Your Business

This isn’t just a price increase. It’s a structural change.

Key impacts:

• A bigger share of your energy bill is unavoidable
• Efficiency alone won’t deliver the same savings as before
• Your connection type and tariff matter more than ever

You’re no longer just paying for energy. You’re paying for access to the network.

What You Should Be Doing Now

With RIIO-3 approaching, now is the time to get ahead.

Focus on:

• Reviewing your connection capacity and agreements
• Checking if your tariff and banding still fit your usage
• Looking beyond consumption for cost savings
• Building rising fixed costs into long-term budgets

This is about control and visibility, not just reduction.

Preparing for What’s Next

RIIO-3 will reshape how UK businesses manage energy costs.

The increases are gradual, but they are consistent. By 2031, fixed charges will make up a much larger share of your total spend. That means less flexibility and more need for a clear strategy.

At Flame Energy, we help businesses stay ahead of changes like this. From procurement to ongoing management, we focus on keeping costs controlled, compliant, and predictable.

Need Support?

If you want to understand how RIIO-3 will affect your business, we’re here to help.