Welcome to the UB Insights

Take advantage of our expert advice with our UB Insights series. Here you will find expert analysis of the energy market, guidance on how to get the most of your supplier, up to date business energy prices and a detailed breakdown on how to save your business money.

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    Wholesale electricity prices

    Customer service ratings

    Citizens Advice has revealed customer service ratings for energy providers, with no company scoring higher than 3.65 out of 5 stars

    Flexible energy solutions required

    Analysis by Cornwall insight suggests that national wholesale and system electricity costs could be cut by an annual £4.6bn in 2030 and £14.1 billion in 2040 if flexible energy solutions are implemented. Additionally, households that participate in flexible electricity initiatives could stand to cut wholesale electricity costs by more than 14% by 2030 and a staggering 50% by 2040 – a predicted annual saving of £115 and £375 respectively for an average household.

    Typically, daily peaks in electricity demand occur on weekdays between 4 pm and 7 pm which means additional more expensive fossil fuel-generated electricity is often required.  This drives up wholesale electricity costs and ultimately impacts consumer bills. Encouraging consumers to modify their electricity usage according to the availability or price of electricity, by, for example, installing smart meters so they can access time-of-use tariffs, and participate in trials like the National Grid ESO Demand Flexibility Scheme will boost off-peak energy usage, saving money and taking pressure off the grid.

    Grants for heat pumps

    Government grants have made heat pumps more affordable than gas boilers, with £7,500 available for installations Homes and small businesses can now benefit from increased government grants to make heat pump installations more affordable.

    The Boiler Upgrade Scheme is now offering £7,500 towards the cost of heat pump installations.

    New power line for the UK

    The government has announced a new initiative between the UK and the Netherlands. LionLink will deliver enough electricity to power more homes than Manchester and Birmingham combined and will be the world’s largest multi-use electricity power line. It should boost UK energy supplies with enough to power 1.8 million homes. LionLink will connect the two countries to each other and to offshore wind farms in the North Sea to provide clean, affordable” energy by the time it is due to be operational by the early 2030s.

    Worried about our electricity bills

    A survey by the Department for Energy Security and Net Zero, conducted in Spring 2023, suggests nearly 66% of respondents expressed either a “very worried” (29%) or “fairly worried” (37%) sentiment regarding their electricity bills over the past three months.

    SMEs could have been mis-sold.

    According to a Guardian newspaper report around a quarter of the UK’s 5.5m small businesses – over 1m companies – may have been forced to renew their long-term energy supply contracts at the peak of the market, according to separate surveys from the British Chamber of Commerce (BCC) and the Federation of Small Businesses (FSB), including through coercion or mis-selling. At the time many small firms struggled to find an energy deal because suppliers either refused to supply small businesses or demanded large financial deposits.

    Since then, market prices have fallen, and on the 1st April the government cut its financial business support, but companies were still locked into long-term contracts that will force them to pay inflated prices based on last year’s peak for months or even years to come. Many were encouraged by the government to sign up for fixed-price deals rather than tracker arrangements, meaning they were locked into high prices.

    Similarly, Energy analysts Cornwall Insight also says businesses that had to fix their energy bills when wholesale prices peaked in August last year will see a rise of up to 133% in their electricity bills from April 1st when the Energy Bills Discount Scheme (EBDS) was introduced. The new scheme is not nearly as generous as the previous one and provides non-domestic energy users with a discount on the price of each unit of energy they use. This kicks in when the price per unit reaches a certain threshold and is limited to a fixed amount. These threshold prices and maximum discounts for electricity have been set at £19.61 per megawatt-hour (MWh) with a price threshold of £302 per MWh – this compares unfavourably to the previous support which provided a discount from a wholesale unit price threshold of £211 per MWh for electricity.

    The Federation of Small Businesses (FSB) believes the change could lead to 370,000 firms being forced to make fundamental changes to their operations, including closure in some cases.

    Could competitive tariffs return?

    There was some good news being discussed in the sector as many expect switching energy suppliers could return later this year after a two-year pause due to lack of competition amid high bills.  Analysts Cornwall Insight say potential conditions later in the year could lead to “the return of competitive tariffs”, and with it the chance for consumers to “take back some control over their energy bills”.

    We have been used to switching suppliers for many years, but this practice halted with the rise in prices as many suppliers went bust leaving those remaining offering fixed deals at or just below the price cap. It is hoped that if prices do ease, we could see suppliers competing for customers again which should mean Utility Bidder will be helping you find more competitive prices and saving you money on gas and electricity bills once more.

    The EBDS is available to all non-domestic customers on contracted, deemed, and out-of-contract rates and is automatically applied to your bill but it’s still worth talking to our experts to compare business energy rates.

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    Content updated 27/11/2023

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    Data sourced from Ofgem, ICE and Nordpool – Content updated 27/11/2023

    Wholesale gas prices

    Price cap figures reflect reduction in usage

    The October price cap has been announced as £1,923, however, most energy experts remain concerned about the price challenges faced by consumers and businesses this winter. The drop will save households an average of £151 pounds compared with the previous quarter. Utility Bidder is of course pleased to see a fall in the price cap but we must remember that although wholesale gas and power prices have fallen by about 85% and 80% respectively since those record highs of last year, there is still price volatility and the price cap remains well above the average before the energy crisis took hold.

    Dr Craig Lowrey, Principal Consultant at market analysts Cornwall Insight, commented: “Although the slight decrease in the price cap won’t significantly impact household energy expenses, it’s a positive development that costs are shifting favourably from October onwards.”

    The consultancy’s projections for 2024 indicate that prices will persist well above pre-pandemic levels, and this pattern is anticipated to persist throughout the rest of the decade. It has issued its estimates for future energy price caps, set each quarter by Ofgem, the regulator.  The present cap, which came into effect on 1 July, is £2,074 a year for an average consumption household on a dual fuel tariff paying by direct debit.

    Looking further ahead, Cornwall says the January 2024 cap will then jump significantly (£2,083 old basis, £1,980 new basis), largely because of the threat of strike action at liquid natural gas facilities in Australia, which would threaten to increase wholesale prices.

    Switching is back!

    The last adjustment in the price cap (1 July) prompted an 85% surge in energy supplier switching according to an article in Energy Live News.  July 2023 saw over 213,000 supplier changes, marking a notable 24% increase from June 2023 and a remarkable 85% rise from July 2022.  This aligns with our own experience where we have seen a surge in SME customers looking to find the most cost-effective supplier they can for their energy prices by asking Utility Bidder experts to trawl the market on their behalf.

    Australian strikes impact gas prices

    Gas prices in the UK experienced a sharp spike a few weeks ago reaching more than double their typical seasonal value. The price hike is in response to fears of a possible shortage in liquified natural gas (LNG) supply from Australia.

    Experts noted this surge is the most substantial since mid-June and is a result of workers at crucial LNG plants in Australia considering taking strike action. On the European benchmark, known as the Title Transfer Facility, prices surged to over €43 (£37) per megawatt hour, marking a substantial increase from the previous day’s value of almost €30 (£25.9).

    Instability continues to play havoc with gas prices.

    In our regular price updates, we often blame geopolitics on the price of gas and once again, events demonstrated the fragility of the situation when a potential coup in Russia resulted in European natural gas rising by 10%. While European natural gas prices were still far below their levels last summer, the swift run-up in prices in June highlighted just how vulnerable the region remains. Price rises have also been blamed on outages at some Norwegian gas plants and because a Dutch gas field will close permanently in October.

    Indeed, experts cautioned against complacency, warning Europe could still face challenges in the coming winter and Goldman Sachs predicts that natural gas prices in Europe will nearly triple from current prices this winter. The bank had previously, correctly, predicted the price of gas would fall through winter 2022-23 but despite Europe’s gas stocks being more than half full it seems circumstances could pile on the pressure.

    Suppliers embracing ‘blend and extend’.

    The Federation of Small Businesses said EDF was joining the ranks of energy suppliers such as British Gas, Engie and Drax to allow small business clients trapped on high-cost fixed tariffs to adjust their contracts to save money. The Federation’s ‘Blend & Extend’ initiative, sees businesses that locked into high prices last summer able to lengthen their contracts to spread the higher costs over a longer period. Current lower energy prices will also feed into the calculation, helping to bring the overall cost down.

    Read More

    Content updated 27/11/2023

    Click to expand

    Data sourced from Ofgem, ICE and Nordpool – Content updated 27/11/2023

    The Energy Price Guarantee

    Former Prime Minister, Liz Truss, announced the Energy Price Guarantee that capped domestic and business energy bills beginning on 1st October 2022 for six months.

    A £400 energy discount scheme has been announced to help households this winter and vulnerable business sectors are also set to receive additional support.

    Check out our Energy Price Guarantee guide for more information.

    Ofgem faster switching

    Are you eligible for the Climate Change Levy?

    The climate change crisis is at the forefront of most people’s minds, including business owners and leaders. To reduce our impact on the environment, the UK government has introduced several environmental tax and relief schemes to encourage small, medium and large businesses to operate in a more environmentally conscious manner.

    The Climate Change Levy, along with the net zero carbon emissions scheme, are methods of encouraging businesses to improve their environmental footprint. But what is the Climate Change Levy and how does it affect your business?

    Recycling Symbol

    Faster Switching Is Here!

    Ofgem has introduced the regulatory project also known as faster switching, which allows energy consumers to switch suppliers easily, and within five working days, from the 18th July 2022!

    Here at Utility Bidder, we have updated our internal processes to support these new switching arrangements. If you are looking to compare business energy suppliers, get in touch with our energy experts today.

    Check out our faster switching guide for more information.

    Ofgem faster switching

    The Energy Bill Relief Scheme Explained

    All businesses with a non-domestic energy account including the voluntary sector and public sector organisations such as schools and hospitals will be eligible for the support through the Energy Bill Relief Scheme (EBRS), which will apply for six months from 1 October 2022 to 31 March 2023.

    Check out our Energy Bill Relief Scheme page to find out more.

    Ofgem website

    The Energy Bill Discount Scheme

    If eligible for the Energy Bills Discount Scheme, the government will apply a discount on your gas and electricity unit prices. Eligible non-domestic consumers will receive a per-unit discount on their energy bills during the 12 months from April 2023 to March 2024, subject to a maximum discount.
    The relative discount will be applied if wholesale prices are above a certain price threshold.

    For most non-domestic energy users in Great Britain and Northern Ireland, these maximum discounts have been set at:

    • Electricity – Discounts of up to £19.61 per megawatt-hour (MWh) when the wholesale prices are above £302 per MWh

    • Gas – Discounts of up to £6.97 per MWh when the wholesale prices are above £107 per MWh If wholesale prices stay below the threshold, the discount is not applied.

    Click here to find out more about the Energy Bill Discount Scheme.

    Utility bills

    The Energy Crisis Guide

    Disclaimer: Views contained on this page are Utility Bidder’s however they do not constitute certainty of market movements. Energy prices are volatile and could go up or down.

    Energy and utility guides

    Frequently asked questions

    We are still seeing extreme fluctuations within the energy market and this doesn’t look like it will improve anytime soon. This have left many customers wondering, should I fix my energy prices until 2023?

    Wholesale energy prices over the last couple of months have hit record highs! Therefore securing your next energy contract now will help you save your business money.

    Delaying your business energy renewal could lead to a higher bill by some margin, avoid paying more by securing your next energy contract today. Current future estimate rates predict that wholesale prices could be near double what we are seeing at the moment, arranging your next contract is likely to save your business in the long run.

     

    Though national demand may begin to creep down as the warmer temperatures heat our homes and offices next summer – Ofgem has already reported that the domestic price cap will be raised in April. The price cap applies to your home energy but this reflects what is expected to happen to the energy market as a whole. It is very likely that prices will still be high in 180 days and our advice is to not risk it and secure your energy agreements as soon as possible.

    In one word, no! Natural gas prices remain at a record high as global economies start to recover from the COVID pandemic.

    In addition, pressure on gas supplies in Europe has seen much lower levels of stored gas than usual and China, in particular, is putting increasing demand on liquified natural gas. This means that higher energy bills are inevitable, we believe rates could rise by at least 20 – 50% which is why your business must act now

    If you work with an award-winning third party energy broker like Utility Bidder – yes you can. The energy market is changing and as we see suppliers ceasing trading on an unprecedented scale your choice of supplier is becoming more limited. However, thanks to our experience and relationships with many energy providers we are confident that we can still save your business money in the longer term.

    Over 15 energy companies have gone bust since autumn 2021. However, should your business energy supplier go bust in the future, Ofgem, the energy regulator will move you to another provider. While that means your business won’t be without supply, it does mean you won’t be able to choose your provider and you could move to a more expensive tariff. That’s why it’s important to keep control of the process by working with Utility Bidder and proactively looking to lock in prices with a stable energy provider.

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