The Network Access Charge is designed to replace the electricity standing charge and the network costs currently hidden inside every unit of electricity.
But does £25 per month actually add up?
And what happens when we offer a lower £12.50 charge to households that use very little electricity?
The real-world numbers suggest the model has substantial headroom.
The Network Access Charge
Under our proposed domestic electricity tariff, households would pay a monthly charge for access to the electricity network rather than today’s standing charge and network costs embedded within the unit rate.
Our starting structure is:
| Network Access Charge | Monthly charge | Purpose |
| Low Usage | £12.50 | Very low electricity-use households |
| Standard | £25 | Most households |
| High Usage | £50 | Exceptionally high network users |
The important point is that the £50 charge is not required to make the £25 charge affordable.
Nor are we relying on high-consuming households to subsidise everyone else.
The numbers work without doing that.
How much electricity do households actually use?
Government electricity-consumption data gives us a useful picture of the distribution.
DESNZ reports that median domestic electricity consumption is around 2,500 kWh per year.
The National Energy Efficiency Data-Framework (NEED) provides an even more useful distribution:
- Around 25% of properties consume 1,600 kWh/year or less
- Median consumption is around 2,500 kWh/year
- Around 75% consume 4,100 kWh/year or less
- Only around 4% of domestic meters consume more than 10,000 kWh/year
This matters because our proposed Low Usage Network Access Charge has been deliberately set below the lower quartile.
Who gets the £12.50 charge?
Our Low Usage threshold is 125 kWh per month, equivalent to 1,500 kWh per year.
That is below the roughly 1,600 kWh annual consumption of the lowest quartile of households.
We therefore estimate that approximately 20–23% of households could fall below the consumption threshold, before applying the additional eligibility rules.
For modelling, we use 22%.
The Low Usage Profile is not intended for second homes, holiday properties or properties artificially minimising grid imports through substantial onsite generation.
Eligibility therefore considers more than annual consumption alone.
That makes our 22% assumption deliberately cautious.
Put real households into the model
There are approximately 28.2 million households in Great Britain.
Using current electricity-consumption patterns, we can model the Network Access Charge approximately as follows:
| NAC | Share | Households | Annual revenue |
| £12.50 Low Usage | 22% | 6.20m | £0.93bn |
| £25 Standard | 74% | 20.87m | £6.26bn |
| £50 High Usage | 4% | 1.13m | £0.68bn |
| Total | 100% | 28.2m | £7.87bn |
That is the important number:
£7.87 billion per year
And it is based on today’s electricity-consumption distribution.
How does that compare with today’s network charges?
Our analysis of the existing electricity system estimates that domestic consumers currently contribute approximately:
£3.5 billion through network costs associated with standing charges
plus approximately:
£3.0 billion through network costs embedded within electricity unit rates.
That gives an estimated:
£6.5 billion per year
currently being recovered from domestic consumers for electricity-network costs.
Our illustrative Network Access Charge structure raises approximately:
£7.87 billion
That is around:
£1.37 billion more
than our estimate of current domestic network-cost recovery.
Or approximately 21% of headroom.
This matters because the Network Access Charge isn’t being designed on a financial knife-edge.
What if the £50 charge raises nothing extra?
We can stress-test the model.
Suppose we abolished the £50 tier entirely.
Every household other than those qualifying for the £12.50 Low Usage charge would pay only £25.
The model would still raise approximately:
£7.5 billion per year
That remains roughly £1 billion above our estimate of the amount currently recovered from households for electricity-network costs.
So the affordability of the standard £25 Network Access Charge does not depend upon the £50 tier.
The higher tier exists because exceptionally high network use should make an appropriately higher contribution towards network capacity.
It isn’t there to make the basic mathematics work.
Why start at £25 if £6.5 billion costs less?
This provides another useful way of looking at the numbers.
If £6.5 billion were simply divided equally between 28.2 million households, the average requirement would be approximately:
£19.20 per household per month
But charging everybody £19.20 would recreate one of the fundamental problems with today’s standing charge.
A household consuming almost no electricity would pay the same as a highly electrified household.
Instead, we start with a £25 standard Network Access Charge and use some of the financial headroom to offer a £12.50 Low Usage charge.
It creates a fairer distribution while still producing sufficient overall revenue.
Then electrification changes the numbers
There is another important factor.
These calculations use today’s electricity consumption.
Britain is gradually transferring energy consumption from other fuels onto the electricity system.
An electric vehicle transfers energy expenditure from petrol or diesel to electricity.
A heat pump transfers energy expenditure from gas, oil or LPG to electricity.
Induction cooking can transfer further gas consumption onto electricity.
As that happens, some households currently qualifying as Low Usage households will naturally move into the Standard category.
Consider just 10% of households moving from £12.50 to £25.
Across 28.2 million households, that would represent approximately 2.82 million properties.
The additional Network Access Charge revenue would be approximately:
£423 million per year.
No increase in the £25 charge is required.
No increase in the £12.50 charge is required.
The revenue increases simply because electricity is doing more of the work previously performed by other energy networks.
That doesn’t mean we want the charge to rise
This is important.
The objective of the Network Access Charge is not to maximise revenue.
£25 is our proposed starting point.
If electrification increases network revenue while efficient network costs do not rise by an equivalent amount, we would expect the Network Access Charge to fall.
That could eventually mean:
£25 → £22 → £20
rather than continually increasing household charges simply because the regulator permits it.
The charge should be reviewed against the actual efficient cost of operating, maintaining and expanding Britain’s electricity networks.
If the system needs less money, households should pay less.
What about the cost of upgrading the grid?
Electrification will require investment.
More electric vehicles, heat pumps and electrically powered businesses will require reinforcement in parts of the distribution and transmission networks.
But it is misleading to discuss those costs without also discussing utilisation.
The electricity network is becoming responsible for delivering energy that was previously supplied through the gas network and through petrol and diesel distribution.
That means greater electricity-network investment is accompanied by a larger electricity-network revenue base.
The question isn’t simply:
“How much will upgrading the grid cost?”
It should be:
“How much will the grid cost per household when millions more vehicles and heating systems are using it?”
Those are very different questions.
A deliberately conservative starting point
The real-world numbers therefore give us confidence in the £25 Network Access Charge.
Using today’s household numbers and today’s electricity-consumption distribution:
Current estimated domestic network revenue: ~£6.5bn
Illustrative tiered NAC revenue: ~£7.9bn
Initial headroom: ~£1.4bn
And that is before widespread further electrification.
Even removing the additional revenue from the £50 tier leaves the model producing around £1bn more than current estimated domestic network-cost recovery.
That doesn’t mean networks should receive £7.9 billion regardless of their costs.
Quite the opposite.
It demonstrates that we can replace today’s confusing mixture of standing charges and hidden per-kWh network charges with a simple, transparent subscription without starting from a position of underfunding.
The £25 Network Access Charge is therefore not an optimistic number dependent upon future savings.
It is a cautious starting point supported by the amount households already pay and by the real-world distribution of household electricity consumption.
And as Britain electrifies, our ambition isn’t to increase it.
Our ambition is to reduce it.
Sources
Department for Energy Security and Net Zero, Subnational Electricity and Gas Consumption Statistics 2024.
Department for Energy Security and Net Zero, National Energy Efficiency Data-Framework (NEED), 2026.
Policy Seed, Why the Network Subscription is £25 per month?