Understanding the Orbit Platform 4 Webinar

Rising Non-Commodity Costs

Non-commodity costs in UK energy bills—charges for network use, balancing, capacity security, and environmental levies—have overtaken commodity (wholesale) prices as the primary driver of expenditure. For electricity, they now account for around 60% of total bills, up from lower shares in prior years, and around 40% for gas.

This shift stems from the UK's push toward net zero: massive grid refurbishments to accommodate renewables, subsidies for low-carbon generation, and measures to balance intermittent supply. Recent developments include Ofgem reforms under the Targeted Charging Review, which reallocate fixed costs more toward capacity-based rather than pure consumption, and indexing shifts from RPI to CPI for certain charges. Most pressingly, Transmission Network Use of System (TNUoS) charges are set for a 61% increase starting April 2026 to fund transmission reinforcements essential for renewable integration.

The Energy Consortium (TEC), a not-for-profit buying group for higher and further education, museums, and research entities, provides its members with the ORBIT platform—developed with Mitie—to manage these complexities. ORBIT delivers daily-updated, fully disaggregated budgets and forecasts that separate commodity volatility from unpredictable non-commodity elements, allowing portfolio-level tracking down to individual supplies over extended risk periods.

Version 4 arrives against a backdrop of frequent updates: prior sessions recapped quarterly non-commodity shifts, highlighting the pace of change driven by regulatory announcements and market adjustments. Without such tools, large energy users like universities risk material budget variances—potentially hundreds of thousands of pounds annually—as these charges feed through supplier bills.

A core tension exists between the long-term benefits of a resilient, decarbonised grid and immediate financial hits to public-sector organisations facing funding squeezes. Reforms like upcoming REMA delivery plans and TNUoS reviews aim to send better locational signals for investment, but they risk uneven short-term impacts before efficiencies accrue.