Electricity
Business Electricity Prices Explained
Wholesale costs, network charges and levies — what each part of a p/kWh rate is doing.
8 min read · Updated 6 August 2026
A business electricity quote is rarely a single number pulled from thin air. It's built from several layers of cost, some of which move with the wholesale market and some of which are fixed by regulation. Understanding each layer helps you judge whether a quote is competitive.
Wholesale cost
This is the cost of the electricity itself, traded on the wholesale market. It fluctuates with gas prices (since gas-fired generation often sets the marginal price), weather, demand and broader market sentiment. When a supplier prices your contract, they typically hedge close to that day's wholesale rate for your contract term.
Network and non-commodity charges
A significant part of every unit rate pays for maintaining the transmission and distribution networks that get electricity to your premises, plus a set of government-mandated environmental and social levies — including the Renewables Obligation and Contracts for Difference schemes. These charges don't move with wholesale prices and are set independently, which is why a renewal quote can rise even when the news reports wholesale prices falling.
What changes the number you're quoted
Beyond the underlying cost structure, several factors affect the specific rate offered to your business:
- Annual consumption (kWh) and your load profile
- Contract length and start date
- Payment method — direct debit is usually cheaper than invoiced billing
- Your credit position and payment history
- Whether you're on a standard, half-hourly or smart meter
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