What’s going on with the energy market and what does it mean for your business?
Now more than ever, businesses will need help to navigate the energy landscape
The UK’s wholesale energy markets have been in the headlines in recent weeks as prices reached record highs. A global surge in demand for gas following a cold winter and depleted gas storage facilities – alongside post-lockdown energy demand in Asia – has caused market prices to surge.
This is having an impact on both gas and electricity prices for domestic and business customers alike because half of the UK’s electricity is generated in gas-fired power plants. Other factors have also played a part in the crisis, including a series of nuclear power outages, the shutdown of a major power cable, and the UK’s least windy summer since 1961, resulting in low wind power.
All of this has served to create a tumultuous energy landscape, but what does this mean for your business energy?
Energy prices are on the rise and suppliers are going under
In just the last five weeks, five energy suppliers have collapsed, and experts are estimating that there may only be 10 suppliers left to offer contracts to customers by the end of the year, compared to the 70 that existed back in January.
Unfortunately, the market highs are set to lead to some of the most expensive winter energy bills in the past decade. As a result, many experts predict that this will drive an extra half a million people into fuel poverty and put businesses across a range of industries at risk of closure.
However, it is important to note that Ofgem has a process in place to reassign customers left by a failed supplier, which should provide some comfort to those currently under contract with a supplier that is financially unstable. The regulator has advised that customers should wait until they find out who their new supplier is before trying to switch to a new one.
What does this mean for businesses?
Business energy has always experienced less regulation than its domestic counterpart, but the news of this winter energy crisis has created even more uncertainty and volatility for commercial end users trying to succeed. Not only will businesses have to adjust to rising energy prices, but they must also then ensure that they are retaining competitive contracts from a reliable and resilient supplier in a fast-changing market. A bad decision now could cost a company thousands of pounds.
Experts are warning that the true effects of this crisis are yet to come, as we enter the coldest and most energy-intensive period of the year. Now is the time to minimise the potential damage to your energy costs and take proactive steps.
No matter what kind of business you are or what the status of your energy contract might be, all businesses need to be paying close attention to the energy market in order to mitigate the risk of future issues.
Consult with the experts in business energy
It’s all too easy to feel overwhelmed by the current state of the energy market, but the right advice can help you get to grips with where you stand and take smart steps forward.
Whether you’re in the middle of an energy contract or currently shopping around for new gas and electricity deals, it is worth consulting with a business energy expert able to provide valuable insight on the energy landscape.
Here at Consultiv Utilities, our expert on-hand advice can help you find the most suitable contracts for your organisation and make sense of the current market chaos. We understand just how daunting the prospect of organising gas and electricity can be, and the pressure to find a reliable and cost-effective option for your premises.
Get in touch with our team today and start prioritising fair and reliable energy costs for your business. We can help you navigate the market and make the best decision regarding your pending renewal – whether it be near term or in the future.
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