You are no doubt aware due to recent media coverage, the UK has not been immune to the worldwide energy crisis in recent months. Energy costs are increasing, and as you will have heard, the Russian invasion of Ukraine has only served to make the situation more challenging.
In real terms, this has resulted in over a 50% increase in wholesale energy costs since January 2022, attributable in part to the EU phasing out Russian gas and the subsequent rationing that we have seen in countries such as Germany and Austria. The closure of a US LPG plant for repairs has further compounded the shortages, adding strain to an already stretched market.
So, what does this mean for UK organisations like yours?
As demand continues to outstrip supply and the price of fuel continues to soar, it is highly likely that costs will continue to increase for the foreseeable future. While the price cap on domestic fuel has been limited to 54% at this stage, businesses have not been afforded the same protection. In fact, it is likely that suppliers will be forced to inflate business utility prices to recoup losses. With further increases in domestic energy prices forecast in October (in the region of a 52% to 59% increase), the same hikes appear likely across the business energy landscape. You can find an interesting piece on the BBC website about rising costs anticipated in winter gas to over £4 per therm (compared to the current average of £2.60) here.
The majority of UK electricity is generated from gas and so, with alternatives such as nuclear power unable to scale up in the short term, these escalating costs will be passed onto both domestic and business consumers.
All of this combined means that unfortunately, we will almost certainly see significant business energy price increases over the coming months.
For this reason, Consultiv Utilities is being proactive in securing the most competitive rates for our clients at today’s rates ahead of these increases. This is intended to help avoid the worst of the price hikes that are set to come. As a result, Consultiv would like to help businesses and help achieve more competitive contracts on energy while we still can. Find out how you can take the uncertainty away from your business’s energy costs with Consultiv.
Or, get in touch with the Consultiv Utilities team now on 0191 250 5557 or by emailing info@consultivutilities.com
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