Estimated network costs per domestic customer (GB average)

Chart

Javascript is required to render chart Estimated network costs per domestic customer (GB average).

Source: Ofgem analysis of network companies’ cost information .

Information correct as of: December 2017

This chart shows our estimate of trends in the annual cost of the different components of network charges for a domestic customer with a fixed amount of consumption. Balancing Services Use of System charges are not included in the chart.

Click the ‘more information’ tab above for a summary of the latest trends, an explanation of network costs and for further detail on how we calculate the costs.

Policy Areas:

  • Electricity - distribution
  • Electricity - transmission
  • Gas - distribution
  • Gas - transmission

Data Table

Estimated network costs per domestic customer (GB average)

Annualised network costsElectricity (transmission)Electricity (distribution)Gas (transmission)Gas (distribution)
Apr-14279410110
May-14279410110
Jun-14279410110
Jul-14279410110
Aug-14279410110
Sep-14279410110
Oct-14279410110
Nov-14279410110
Dec-14279410110
Jan-15279410110
Feb-15279410110
Mar-15279410110
Apr-1532879114
May-1532879114
Jun-1532879114
Jul-1532879114
Aug-1532879114
Sep-1532879114
Oct-1532879114
Nov-1532879114
Dec-1532879114
Jan-1632879114
Feb-1632879114
Mar-1632879114
Apr-1638939116
May-1638939116
Jun-1638939116
Jul-1638939116
Aug-1638939116
Sep-1638939116
Oct-1638939116
Nov-1638939116
Dec-1638939116
Jan-1738939116
Feb-1738939116
Mar-1738939116
Apr-1738869113
May-1738869113
Jun-1738869113
Jul-1738869113
Aug-1738869113
Sep-1738869113
Oct-1738869113
Nov-1738869113
Dec-1738869113
Jan-1838869113
Feb-1838869113
Mar-1838869113
Apr-1837839118
May-1837839118
Jun-1837839118
Jul-1837839118
Aug-1837839118
Sep-1837839118
Oct-1837839118
Nov-1837839118
Dec-1837839118
Jan-1937839118
Feb-1937839118
Mar-1937839118

More information

Estimated network costs per domestic customer: At-a-glance summary

  • The majority of network costs for a domestic customer are for the use of the gas and electricity distribution networks.
  • For a household whose consumption does not change, on average across GB we expect network costs in 2018/19 to increase for gas distribution, decrease for electricity distribution, and stay broadly static for transmission costs compared to the previous charging year.
  • Actual costs will vary depending on where a customer lives, how much energy they use, and what type of meter they have.

What are network costs?

Suppliers are charged for the costs to build, maintain, improve and operate the energy networks. Most of the networks are owned by monopoly businesses. Therefore through regulation, we limit the revenue that these companies can recover from customer charges to run the networks.

The network charges paid by suppliers vary depending on where their customers live, what type of meter they have, when energy is used and how much energy they use. In total, these charges accounted for approximately a quarter of a dual fuel bill in 2016.

Different charges apply for the high voltage/pressure transmission networks (which take electricity and gas around Great Britain) and the lower voltage/pressure distribution networks, which connect customers to the overall networks.

As well as the charges to suppliers that are considered here, electricity generators and gas producers are also charged for their use of the networks. It is important to note that trends in network costs will therefore also affect supplier costs indirectly through wholesale prices.

Methodology

  • Network costs are calculated by combining charging information published by the network companies with assumptions about consumption and losses for domestic customers.
  • All costs are calculated for medium annual typical domestic consumption values of 12,000kWh for gas and 3,100kWh of electricity, which is held fixed across the charging years. The actual network costs a supplier incurs to serve a customer will depend on how much energy is used, the timing of its use as well as the charges that apply from one year to the next.
  • The costs shown are GB averages, calculated by taking a customer number weighted average of the tariffs that apply in different regions of the country.
  • The costs are expressed in nominal money (i.e. the amount of money a customer ‘pays over the counter’), rather than in real terms (i.e. after adjusting for inflation). For electricity, the costs reported are for a standard unrestricted meter.
  • Balancing Services Use of System charges are not included on the chart. These charges cover the cost of services used to balance the electricity system and internal system operator operating costs.

The methodology we use to calculate these charges is consistent with our methodology for the Supplier Cost Index, and that used to set the value of the prepayment meter price cap. Further details on the calculations are available in our Supplier Cost Index methodology.

Further information

You can find further information on the different components making up an energy bill at Understand your gas and electricity bill.

To see how the network fits together, visit The energy network: How it works for you.

Date correct
December 2017
Policy areas