UK retailers face £440 million rise in electricity costs this year
UK retailers are set to see their electricity bills increase by £440 million in 2026, despite unchanged energy use, according to a British Retail Consortium report. The report projects electricity costs to climb from £2.72 billion in 2025 to £3.16 billion in 2026, a 16% rise driven largely by growing non‑commodity charges.
Transmission Network Use of System charges alone are forecast to jump by 72%, adding almost £200 million to retailers’ annual electricity bills. Non‑commodity charges, which include government levies and volatile network costs, now typically make up about two‑thirds of a retailer’s electricity bill. Following decarbonisation investments, roughly 90% of the retail sector’s energy consumption is now electricity, leaving the industry especially exposed to price swings in the power market. Over the past two years, retailers have already absorbed £6.5 billion in extra employment costs, including higher national insurance contributions and living‑wage increases above inflation.
“With another £440 million increase this year despite their energy use barely changing, the Chancellor must take action to reduce the plethora of policy levies, as well as stabilise the predictability of network charges that are driving up the cost of energy,” Helen Dickinson, Chief Executive at the British Retail Consortium said.
The industry has already been hit by £6.5 billion in additional employment costs over the past two years, including higher employer national insurance contributions, above inflationary increases to the national living wage and other employment related costs.
What we know
Retailers face a £440 million increase in electricity costs this year, despite their energy use remaining virtually unchanged, according to a new report from the British Retail Consortium (BRC).
The report notes that electricity costs are expected to rise from £2.72 billion in 2025 to £3.16 billion in 2026, an increase of 16% in just one year.
Transmission Network Use of System charges alone are expected to rise by 72%, adding almost £200 million to bills.
following investment in decarbonisation, around 90% of the industry’s energy use now comes from electricity.
The industry has already been hit by £6.5 billion in additional employment costs over the past two years, including higher employer national insurance contributions, above inflationary increases to the national living wage and other employment related costs.