What is the standing charge?

A fixed daily charge paid whether or not you use energy

If a household uses more energy but the rates stay the same, what happens to its bill?

It rises in a straight line, because each kWh costs the unit rate

Which pays for the pipes and wires that carry energy to homes?

Network costs, which maintain the pipes and wires

What is in your energy bill, and why is there a standing charge?

Even if you use no energy at all for a day, you still pay for it: under the October 2026 price cap the average electricity standing charge was 54.83p a day.

An energy bill has two parts: a price for every unit of energy you use, and a fixed daily charge for being connected. The fixed part is the , a fee you pay each day even if you use no energy at all. Behind both sit four main kinds of cost: buying the energy on the market, paying for the pipes and wires, funding government energy programmes, and the supplier's own running costs.

A unit of energy is a , or kWh. From October 2026, under the price cap, the average rates were 26.32p per kWh for electricity, plus a of 54.83p a day, and 7.97p per kWh for gas, plus 29.68p a day. These are averages for England, Scotland and Wales; the standing charge differs depending on where you live.

The covers the expense of maintaining and upgrading energy networks, metering, billing systems, and policy and legacy costs. That is why a household that is away on holiday still pays it.

Try it

Your bill is a straight line

y = 0.25x + 200

Unit rate, £ per kWh0.25Standing charge, £ a year200

Challenge · With a unit rate of £0.25 and a standing charge of £200 a year, what does a home using 2,000 kWh pay?

A simple model: bill = unit rate x kWh + standing charge. The October 2026 cap averages (26.32p per kWh and 54.83p a day, about £200 a year) sit close to the starting values; the sliders move in round steps.

Where does the money go? energy is typically the largest part of the bill, around 40% in March 2026. Network costs pay for the pipes and wires that carry energy to homes. Policy costs fund programmes that support vulnerable households, improve energy efficiency and help deliver decarbonisation. Operating costs cover billing, metering and customer service.

Three buckets in a bill, April to June 2026

% of the bill

Bar chart: Three buckets in a bill, April to June 2026. (% of the bill)
	Share of the bill
Wholesale	42 % of the bill
Network	30 % of the bill
Policy	7 % of the bill

Shares from Pierce Leslie (Atlas Institute), using Ofgem figures. Other costs, such as supplier operating costs, make up the rest.

Put together, your bill is a straight line: units used times the unit rate, plus the . Use more and the line climbs; use nothing and you still start from the standing charge.

Quiz me

0/3

1.What is the standing charge?
2.If a household uses more energy but the rates stay the same, what happens to its bill?
3.Which pays for the pipes and wires that carry energy to homes?

Recap

Bill equals units times unit rate, plus standing charge; wholesale energy is the biggest bucket inside the rates.

💡 A trick to remember it · A bill is a taxi meter: the standing charge is the fare you pay when you step in, and the unit rate is the clock that ticks as you ride.

Surprising fact · Even with no energy used, the standing charge is still charged every day.

Connects to

🌌 See it on the map →

Sources (7)

No source, no claim. Every fact in this lesson (16 claims) cites at least one of these.

What is in your energy bill, and why is there a standing charge?

Quiz me

Recap

How do other countries price energy: Sweden, Germany, France, Spain and the UK?

Is a heat pump cheaper to run than a gas boiler?

What is happening to UK prices, and how do the US and eurozone compare?

One more light on your map.