This map follows electricity from where it is made to where it is used, and shows the main costs picked up along the way that end up on an electricity bill for a home or small business in Great Britain.
Two prices on every bill
Most household and small business bills have two parts: a unit rate, charged for each kilowatt-hour (kWh) used, and a standing charge, a fixed daily amount paid however much you use. Every cost on this map is recovered through one or both, with VAT added on top. For households on a standard variable tariff, Ofgem's price cap sets the maximum unit rate and standing charge. Fixed-price deals and business contracts are not covered by the cap.
1. Generation
Electricity is made by gas, wind, solar, nuclear and biomass power stations, and some is imported from neighbouring countries through undersea cables called interconnectors. Suppliers buy it on the wholesale market, and this is usually the largest single cost on a bill. On top of that come policy levies: charges the government adds to electricity bills to pay for specific goals. Four of them fund low-carbon power: the Renewables Obligation, Contracts for Difference, the Feed-in Tariff and the Nuclear Regulated Asset Base. A fifth, the Capacity Market, pays power stations, batteries and other providers to be ready when demand peaks. Since April 2026 the government has paid 75% of the Renewables Obligation's cost for households out of general taxation, so households pay only a quarter of it while business customers still pay it in full. Suppliers selling green tariffs may also buy certificates, called REGOs, that prove electricity came from a renewable source.
2. Transmission and the system operator
Electricity then travels long distances on the high-voltage transmission grid, the network of pylons and large cables. NESO, the National Energy System Operator, runs this system and keeps supply and demand matched second by second. This adds three costs. Transmission Network Use of System charges (TNUoS) pay for building and maintaining the grid. Balancing Services Use of System charges (BSUoS) pay for NESO's balancing actions. Transmission losses are the small share of electricity lost as heat on the way, which suppliers cover by buying slightly more energy than their customers use.
3. Distribution
At substations called Grid Supply Points, the voltage is lowered and electricity passes to a regional distribution network, which carries it along local cables to homes and businesses. This adds Distribution Use of System charges (DUoS), usually the largest network cost on a household bill, and distribution losses, which are larger than transmission losses because more energy is lost at lower voltages. It also adds Assistance for Areas with High Electricity Distribution Costs (AAHEDC), a small levy paid by all GB customers to keep network charges affordable in the north of Scotland, where the network is especially expensive to run.
4. The supplier
The supplier collects almost every cost above from its customers and pays it on. It also has costs of its own: buying energy months in advance to protect against price swings (hedging); paying for any gap between the energy it bought and what its customers actually used (imbalance); running the business; covering customers' unpaid bills; and a small profit margin. Two more schemes are funded through suppliers: the Warm Home Discount, a winter bill credit for eligible low-income households, and Network Charging Compensation, which refunds part of the network charges paid by energy-intensive industries.
5. Consumption
Finally the bill reaches the customer: a home, a small or medium-sized business (SME), or an industrial site. Taxes are added last: VAT on every bill, at a lower rate for households than for most businesses, and the Climate Change Levy on business bills only. So not every bubble applies to every customer, and the mix differs between a home, an SME and an industrial site.
Above all of this sit the rule-makers. The Department for Energy Security and Net Zero (DESNZ) decides energy policy and proposes the laws that Parliament passes. Ofgem, the independent regulator, applies the rules: it licenses energy companies, sets how much the network companies can earn, and sets the household price cap. Neither appears as a line on the bill, but between them they shape almost every cost on this map.