--- title: "Targeted charging review explained" description: "What is TCR? The Targeted Charging Review (TCR) is an Ofgem initiative reforming how network charges are applied to UK electricity bills. Find out how it works." url: "https://www.fuseenergy.com/blog/what-is-tcr" updated: "2026-10-18" --- # Targeted charging review explained When you see "TCR" in the context of your energy bill, it refers to the Targeted Charging Review. This is a significant initiative by Ofgem, the UK's energy regulator, designed to reform how network charges are applied to electricity bills. These changes aim to make the system fairer and more efficient for all energy users, including homeowners. Understanding these charges can feel like navigating a maze, but Fuse Energy is committed to transparent pricing and clear explanations, helping you make sense of your energy costs. Click [here](https://www.fuseenergy.com/app/boarding/premises) to switch to Fuse Energy today. ## Demystifying TCR: Targeted charging review in UK energy ### Understanding the acronym "TCR" can mean different things in various fields. However, in the UK energy market, TCR specifically stands for the **Targeted Charging Review**. This is a key regulatory change that directly influences how much you pay for the electricity network that delivers power to your home. ### Why network charges are changing The UK's energy market includes several charges beyond the cost of generating electricity. A significant portion of your bill covers network charges, which pay for the transmission and distribution infrastructure - the pylons, cables, and substations that get electricity from power stations to your plug socket. Ofgem periodically reviews these charges to ensure they are fair, promote efficiency, and support the country's transition towards a net-zero energy system. The Targeted Charging Review is one such initiative, aiming to update how these essential network costs are recovered from energy users. ## How the Targeted charging review works ### The role of network charges Network charges are a fundamental part of your electricity bill. They cover the costs incurred by Distribution Network Operators (DNOs) and National Grid Electricity Transmission for building, maintaining, and upgrading the electricity grid. These charges are typically broken down into two main components: Distribution Use of System (DUoS) charges and Transmission Network Use of System (TNUoS) charges. The TCR specifically targets the 'residual' element of these charges, which is the part that covers the fixed costs of the network that do not vary with how much electricity is used. ### Shifting from variable to fixed costs A core change introduced by the Targeted Charging Review (TCR) is the shift in how these residual network charges are levied. Historically, a larger proportion of these costs were recovered through a variable charge per unit (kWh) of electricity consumed. Under the TCR, a greater share of these residual costs is now recovered through a fixed daily charge, rather than being tied to your consumption. This means that regardless of how much electricity you use, a larger, fixed daily amount contributes to network costs. > **What is the main change from the TCR?** > > The primary change from the TCR is a shift in how the 'residual' component of network charges is collected. Previously, more of these costs were variable, charged per unit of electricity consumed. Now, a larger proportion is recovered through a fixed daily charge, meaning your contribution to network maintenance is less dependent on your exact electricity usage. ### Implementation timeline The changes brought about by the TCR were rolled out in phases. The first phase, which primarily affected 'embedded generators' - smaller power plants connected to the distribution network - began in April 2021. The second phase, directly impacting final consumers, including residential customers, came into effect in April 2022. This is when the changes to how network charges appear on household electricity bills began to be seen. ## Impact on your household electricity bill ### What residential customers need to know For homeowners, the most direct impact of the TCR is that a larger portion of the network costs you pay is now collected via a fixed daily charge. This means your daily standing charge, which you pay regardless of how much electricity you use, may have increased to reflect this change. Conversely, the variable per-unit cost for network charges, embedded within your unit rate, has generally decreased. Understanding your energy bill components, including the daily standing charge, is key to managing your costs. ### Potential changes to your daily standing charge You might notice that your daily standing charge has increased since April 2022. This is largely due to the TCR reforms, as suppliers adjusted their tariffs to reflect the new charging methodology. While the exact impact varies by supplier and tariff, the overall aim is to recover network costs more equitably. For instance, a household that uses very little electricity might see a proportionally larger increase in their overall bill due to the higher fixed charge, while high-usage households might see a smaller overall change or even a slight decrease in the network charge component of their bill. ### Managing your energy usage The average UK home uses around 2,500 kWh of electricity per year. With a higher fixed daily charge, understanding your consumption patterns remains crucial. While reducing your kWh usage will still lower the variable part of your bill, the fixed daily charge is constant. This reinforces the importance of choosing a tariff that suits your usage habits and being mindful of overall energy waste. You can monitor your usage more effectively with a [smart meter installation](https://www.fuseenergy.com/blog/smart-meter-installation). ## Empowering homeowners in a changing energy market ### Understanding your bill components Demystifying your energy bill starts with understanding its various components. The TCR highlights that your bill is not just about the electricity you consume; it also covers the essential infrastructure that delivers it. Knowing how network charges, standing charges, and unit rates contribute to your total cost puts you in a better position to manage your energy budget. For more details on how your energy costs are structured, you can learn about the energy price cap explained. ### Making informed energy choices With the changes from the TCR, making informed energy choices is more important than ever. This includes: * **Reviewing your tariff:** Ensure your current tariff still suits your household's energy consumption, especially considering the shift towards higher fixed charges. * **Monitoring usage:** Keep an eye on your electricity consumption through smart meter data or your supplier's app. * **Considering energy efficiency:** While fixed charges are unavoidable, reducing your overall kWh consumption remains the most effective way to lower the variable part of your bill. By understanding what the TCR means for your household, you can take control of your energy costs and make decisions that best suit your needs. Managing your energy bills should be clear and easy to understand. Fuse Energy focuses on straightforward pricing, so you can see exactly what you are paying without unnecessary complexity. If you have a smart meter, you can view detailed usage data through the app or website, helping you understand how you can lower your bills. Our 24/7 human support team is always on hand with fast response times whenever you need help. Click [here](https://www.fuseenergy.com/app/boarding/premises) to switch to Fuse Energy today. Find out about our mission by clicking [here](https://www.fuseenergy.com/mission). --- Rates, availability, and regional off-peak windows change. Check the source page for current terms. **Disclaimer** For the avoidance of doubt, this article is provided for informational purposes only and is not intended to constitute legal or financial advice. The author and/or Fuse Energy shall not be responsible for any losses arising out of any reliance on the information contained herein.