Why Capacity and kVA settings matter more than ever for manufacturers

That approach made more sense under the previous charging framework, but it makes far less sense in 2026.

Historically, a meaningful portion of transmission charges was influenced by time-of-use demand, particularly the Triad periods. Businesses that understood when the system was under stress could influence part of their exposure.

Following Ofgem’s Targeted Charging Review (TCR), that structure changed. A significant share of residual network costs is now recovered through fixed, capacity-based charges linked to connection voltage and agreed capacity bands.

In simple terms, more of your electricity bill is now determined by how your meter is classified than by when you use energy.

From April 2026, as RIIO-ET3 begins and TNUoS residual revenues increase sharply, those fixed charges will rise again. What was once marginal becomes material.

Every half-hourly meter is assigned an agreed capacity, measured in kVA. That capacity sits within a defined band. The band determines the level of fixed residual charges applied per meter, per day.

This is not a measure of annual consumption. It reflects the level of demand the network must be ready to support.

A business can have multiple meters at one facility. Each meter attracts its own standing and residual charges, and each sits within its own band.

That structure means two things:

There are several common scenarios where manufacturers overpay without realising it.

Some sites are misaligned because historic capacity agreements were never updated after operational change. Electrification, process redesign, on-site generation, or meter consolidation can materially alter demand without triggering a formal capacity review.

Other sites sit close to the upper or lower edge of their assigned band. Being near a threshold can increase exposure or limit flexibility if demand shifts.
And in some cases, businesses consistently underuse their agreed capacity. After efficiency projects or production changes, the headroom originally required is no longer necessary, yet the band, and associated daily charge, remains unchanged.

None of these issues are operational failures. They are classification issues.

The impact of capacity and banding decisions has grown because the charging balance has shifted.

With residual charges increasingly recovered through fixed per-meter daily rates, and with those rates rising significantly from April 2026 onwards, banding has a larger influence on total cost.

For manufacturers with multiple meters, the exposure is multiplied. For those in higher voltage or higher capacity bands, the step changes are more pronounced.

In this environment, capacity settings are no longer technical housekeeping. They directly alter the bottom line.

Energy efficiency projects reduce kWh. They often reduce the maximum demand (i.e. peak loads) as well. But unless agreed capacity and banding are reviewed alongside or as part of the efficiency project, the fixed charging framework means that these costs will remain the same.

This is why businesses can improve operational performance and still feel financial pressure from network charges. The savings are real. The charging structure simply has not been revisited.

Efficiency should therefore act as a trigger for a technical sense-check. When demand profiles change, capacity agreements should be examined alongside them.

Capacity and kVA settings sit within the technical layer of an energy strategy. They define part of the fixed cost base on which operational and commercial decisions rest. If misaligned, they can dilute savings achieved elsewhere. If reviewed deliberately, they can improve cost stability at a time when fixed network charges are rising.

As the UK’s transmission recovery continues to shift toward capacity-based charging, ignoring banding becomes increasingly difficult to justify.