Cornwall Energy's latest Third Party Charges report finds that non-energy costs in 2017-18 are likely to fall in real terms for both domestic (-1.5%) and small non-domestic (-0.2%) electricity customers. This is due to a predicted fall in both electricity transmission and distribution costs on a GB-average basis.

However the reduction is unlikely to materialise for all customers, due to the locational nature of these network charges. Reductions in transmission charges are more likely for those customers located in the north of GB, specifically those located in and north of the Yorkshire and North West distribution regions. Demand transmission costs are generally lower for those in the north and higher in the south, because those in the north are located closer to much of the country's generation. But this locational distribution of charges could be further polarised due to the planned completion of the Western High Voltage Direct Current (HVDC) bootstrap in 2017-18 which, under Project Transmit and industry change proposal CMP213, would be predominantly paid for by those in the south. It should be noted that CMP213 is currently under judicial review from RWE npower, and the case was heard on 1 July, to which we await further information.

Charges for a number of distribution regions are also forecast to fall in real terms in 2017-18. Distribution costs typically form a much greater component of the bill (around 20% against 3%-8% for transmission charges in the domestic electricity bill). However the direction and level of movement varies greatly between distribution regions, with the greatest decrease expected in the West Midlands.

Against this fall in network charges, those costs that subsidise the deployment of renewables generation are forecast to increase their steady growth. By 2017-18 the costs of the Renewables Obligation and the small scale Feed-in Tariffs are expected to breach £65/annum on the domestic energy bill. By this point the costs of the new Contracts-for-Difference subsidy regime are also forecast to be substantial, equating to around £6/year for the typical domestic consumer as a number of subsidised plant are due to come online by this point. The cost increases are so great that large non-domestic customers, to whom network charges form a lower proportion of the bill and renewable costs form a greater proportion, are not forecast to see a drop in charges in most regions.

Domestic energy efficiency costs are subject to the reviews of the Warm Homes Discount and the Energy Company Obligation. Non-domestic costs under the Climate Change Levy are likely to increase with inflation, although in effect they will go up significantly with the Chancellor's new plan to scrap Levy Exemption Certificates for renewable generation. This change will mean that a large proportion of electricity supplied to non-domestic customers will now be effectively up to £5.54/MWh more expensive.

Gas non-energy charges are forecast to remain comparatively stable for domestic and small nondomestic customers (+/-1% year-on-year), as gas lacks the buoyant influence of renewables subsidies. However for large non-domestic customers non-energy costs could increase by 5% by 2017-18.