
A few factors are;
- To keep your property connected to the UK energy network
- Using the pipes and wires across the country that carry the energy needed to power your home
- Meter operators (people coming out to read your meters)
- Government initiatives to help people unable to afford energy, and to also help reduce CO2 emissions countrywide
- Maintenance and upgrading the infrastructure
- Costs of transporting and importing fuels from other countries
In this current climate, the rule of thumb for calculations on non – commodity charges can equate to around 70% of your total energy costs, therefore when purchasing or managing energy accounts, it is imperative to have a full understanding of how they work and what can impact their prices.
Gas
Natural gas for use in the UK comes from multiple sources such as Norway which is transported through interconnectors travelling under the North Sea, or even further away from USA in the form of liquefied natural gas (LNG) which is delivered via cargo ships.
By transforming the gas into a liquid, it can be compressed to around 600x less volume between transporting it from the source to the UK gas terminals.
The Gas can either be transported directly to CCGTs (Combined Cycle Gas Turbine Plants) to generate electricity or transported through high-pressure pipe systems to compressor stations where the pressure will fall until it is low enough to be used in homes and businesses.

Electricity
To minimise energy loss in the power lines, generated power is transformed through a series of substations. Heat and light is created when an electric current is passed through a conductor which is wasted energy. To minimise the loss of energy, the voltage is increased using a transformer which reduces the electric current. This means that more energy can be transmitted along the power lines with less wastage.
The electricity is transmitted all over the UK at high voltages in the transmission network. Once it gets to the distribution network, electricity needs to be transformed in a step-down transformer to lower and lower voltages, when it can be safe to use in our homes and businesses.

Why have non – commodity costs increased?
As previously mentioned, non-commodity costs are used to cover several factors that your energy provider incurs for supplying gas and electricity to your meters.
When looking at the factors previously mentioned, it is understandable as to why these costs are implemented. What makes it difficult to understand is why these prices fluctuate significantly.
Since 2021 onwards, due to several unfortunate events, we have seen some customers pay some of the highest standing charges on record, mainly for electricity meters. As nearly all properties have an electric supply, it was only seen fair that the electricity standing charges was massively increased compared to gas.
Here are a few of many reasons as to why prices have increased.
- Inflation. 11.1% in October 2022. The October figure was the highest annual CPI inflation rate in the National Statistic series, which began in January 1997
- Increase in fuel costs. In July 2022 fuel prices peaked by 48% compared to the previous year. LNG is delivered via cargoes from the USA therefore transportation costs increased.
- Record heatwave. In 2022 the UK faced its record temperatures. Ambient temperatures can impact transmissions, the higher the ambient temperature, the lower the megawatt rating on transmission lines.
- Dissolved Suppliers. Many suppliers had gone into liquidation throughout 2021 and 2022. When this happens, OFGEM will assign a new supplier to take on the customers. As suppliers have not considered their volume in advance, distributors will charge the suppliers.
If you’d like to find out more, please get in touch with the energy team at [email protected] or view our framework options for the different ways to procure energy.