Energy explained
From power station to your premises.
Six steps that decide what your business pays for energy — and which parts of the price can actually be managed.
Step 1 of 6
Generation
Electricity is made by power stations, wind and solar farms, nuclear plants — and imported through cables from Europe.
- Gas power stations still set the price most of the time, because they are switched on last to meet demand.
- Wind and solar cost almost nothing to run, so on windy, sunny days wholesale prices fall.
- Interconnectors bring power from France, Norway, the Netherlands, Belgium, Denmark and Ireland.
Why it matters to your business: When gas prices rise, your electricity price usually follows — even if half the grid is renewable.
What makes up your unit rate
An illustrative split for a typical UK business electricity price. Your own split depends on region, meter type, contract and timing.
- Wholesale energy~45%
- Network charges~25%
- Policy & balancing costs~15%
- Climate Change Levy~5%
- Supplier costs & margin~7%
- Broker fee~3%
Stuck on a term? Search the energy glossary.
Want this applied to your own sites?
HENOC clients get it inside their Client Hub, alongside their renewal dates and market updates.