The recent surge in energy prices is impacting homes around the country. But what does this mean for the business community and how can you protect your organisation?
The energy market has been making headlines in recent weeks, with natural gas prices at record highs. To protect households from the volatility of the energy market, the energy price cap was first introduced back in 2017. However, in recent weeks there has been talk around the cap increase and potential future “significant rises” warned by the energy regulator Ofgem.
Amidst this controversy, suppliers are calling for change, saying the current energy price cap model is “not fit for purpose”. According to these organisations, energy consumers could face a huge cost due to a number of firms going bust.
As uncertainty around energy supply and pricing continues, there have also been calls for an energy price cap to help small businesses. This comes just as the UK economy finds itself trying to recover from the damage done by the COVID-19 pandemic. Last month, nine energy companies went out of business. This resulted in 1.7 million energy customers being forced to move to new suppliers and higher rates.
What does all this mean for businesses, and what can you do about it?
Since January 2021, wholesale gas prices have increased 250%, leading to calls for the government to take action. This is because prices are projected to climb further over the coming months, putting more consumers and companies at risk.
Business owners and industry leaders are also calling for a price cap so that companies don’t suffer from crippling increases in energy costs. The British Chambers of Commerce, in particular, have called for a price cap to be introduced for small and medium-sized businesses with 250 employees or fewer. The absence of a cap leaves companies at the mercy of fluctuating market rates and a very uncertain future.
Organisations due to renew fixed energy contracts soon are currently facing a hike in costs that can seriously damage profitability. The BBC spoke to nursery and soft play owner Gordon Foster whose energy contract is up for renewal. Gordon explained he’s looking at paying 8x his current rate in a contract that would tie him in for years.
Is your energy contract expiring soon?
If you have a contract expiring in the next few months, act now to get ahead of any potential increases. For businesses with longer contracts, it is still advised to complete a review as longer-dated contracts are being priced more favourably now.
By reviewing your business energy with Consultiv Utilities, you won’t have to struggle alone. We can ascertain your total energy budgets and provide peace of mind that, despite costs increasing, you will retain both, competitive and resilient supply offers available to you. This ensures you can budget accordingly for future energy overheads.
Let us help you make more informed decisions regarding your future energy budgets. Our review comes with no obligation to proceed and is entirely free.
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