Generation Distribution Use of System (GDuoS)

Generation Distribution Use of System (GDuoS) prices for the 2025-26 year have been released by all Distribution Network Operators (DNOs), and there is a notable forecasted increase in embedded benefits across UK Grid Supply Point (GSP) regions.

In this blog, we’ll explore embedded benefits in the UK electrical network, GDuoS charges, Red, Amber, and Green (RAG) rate charges, along with visual presentations of the changes between 2023/24, 2024/25, and 2025/26 years.

What are Embedded Benefits?:

Embedded benefits are financial advantages that energy suppliers receive from having embedded generation in the electrical network. In this context, embedded generation refers to electricity supplied to the distribution network—providing electricity at the local level—rather than the transmission network, which supplies electricity nationwide.

Network operators offer payments to energy suppliers, determined by the amount of embedded generation in the network. These payments serve as incentives, encouraging suppliers to continue developing and maintaining their embedded generation.

GDuoS Charges:

A primary component of these payments are the GDuoS charges. Typically, energy generators pay use-of-system charges to network operators for using the transmission and distribution networks. These charges are in place to recover the costs involved in transporting electricity over long distances, to which large, transmission-connected generators pay a high amount. Energy generators with embedded generation avoid some of these costs, as their energy is generated and consumed locally, thereby alleviating the strain on the wider transmission network. These generators pay reduced GDuoS charges, which can be interpreted as savings. Additionally, they receive payments from network operators in recognition of their embedded generation.

RAG Rate Charges:

RAG represent the different periods of electricity demand in the UK. The red category signifies the highest or peak demand, amber for moderate, and green for periods of low demand.

GDuoS charges applied to each of these demand periods are referred to as RAG rate charges, and these charges highlight how the timing of embedded generation and consumption can have significant financial implications.

Embedded Benefits Across The 2023-24, 2024-25, and 2025-26 Periods Provided below are analyses and graphs of embedded benefits for RAG rate charges, measured in pence per kilowatt-hour, across various geographical areas within the distribution network (GSPs), designated by the numbers 10 to 23.

The chart compares three fiscal years: 2023/24, 2024/25, and the recently released 2025/26, each colour-coded to distinguish the data for each year. The values are plotted on the y-axis and they are all negative, which represents a rebate or reduction in network charges that suppliers receive for embedded generation during the three RAG rate periods.

For each GSP region, there are three bars showing the value of the embedded benefit for each of the fiscal years. The consistent presence of negative values across the GSP regions suggests that all areas are experiencing some form of embedded benefits.

Red Rate Charges:

For embedded generators, generating power during these red periods can be particularly beneficial. By supplying electricity when the demand (and the price) is at its highest, embedded generators can offset these peak charges significantly. For the current year, embedded generators are set to receive an average of 4.1p/kWh (£41/MWh) in savings, increasing to 4.81p/kWh (£48.1/MWh) for 2025-26.

Amber Rate Charges:

Embedded generators operating during amber periods still have their benefits, though not as pronounced as during red periods. By contributing to the energy supply during these times, embedded generators can help stabilise the network and reduce the need for expensive energy imports or activation of peaking power plants. For the current year, embedded generators are set to receive an average of 0.48p/kWh (£4.8/MWh) in savings, increasing to 0.55p/kWh (£5.5/MWh) for 2025-26.

Green Rate Charges:

During green periods, the benefit of embedded generation is drastically less in terms of cost savings. For the current year, embedded generators are set to receive an average of 0.07p/kWh (£0.7/MWh) in savings, increasing to 0.08p/kWh (£0.8/MWh) for 2025-26.

Of particular note is GSP 17 in the Scottish Highlands, which receives over three times the average rebates compared to the others. This is significant, considering the limited transmission network in the highly rural area.

As presented in the above graphs, embedded benefits for the 2025-26 year are, on the whole, more generous than those granted in the current and previous periods, as indicated in the averages column. For all demand periods, RAG rates have been significantly boosted across the GSP regions, highlighting the incentive for renewable energy generators to supply their electricity at the local level instead of the transmission network.

Overall, the interaction between embedded generation, RAG rate charges, and GDuoS charges highlights the complex and dynamic nature of energy pricing and the incentives designed to promote more efficient and sustainable energy usage. These mechanisms encourage not only the adoption of local generation solutions but also intelligent energy management practices that align with the varying demand and pricing structures of the electricity grid.