The ongoing UK energy crisis is reshaping the energy landscape with reduced wind energy, soaring gas costs, and heightened geopolitical tensions, causing unprecedented turbulence in the wholesale energy market. Consequently, businesses and residents across the UK are facing a substantial surge in energy costs, leading to higher bills.
On April 1, 2022, the energy price cap for variable dual fuel tariffs reached a record high of nearly £2,000, making it challenging to find competitive deals on comparison websites due to market complexities.
Evaluating the viability of switching energy suppliers: Presently, amidst a landscape where no UK energy supplier can offer enticing fixed-term deals due to the lingering effects of the 2021 energy crisis, businesses find themselves at a crossroads. However, businesses with high energy consumption, such as restaurants, might still discover value in exploring deals on comparison sites if their energy bills surpass the prevailing price cap.
Balancing the energy equation for businesses: The scenario for businesses isn’t markedly different from that of residents. Over the past year, the average small business has witnessed an extraordinary 250% surge in gas costs. Unfortunately, in contrast to domestic customers, the government has yet to provide definitive support for businesses struggling with bill payments.
A potential saving grace lies in the availability of fixed deals that could offer better value for certain businesses. However, businesses with higher energy usage remain susceptible to the volatility of variable-rate tariffs.
Addressing the lack of a price cap for businesses: As of now, there isn’t a specific price cap for businesses, prompting ongoing discussions and calls for its introduction. Despite the existence of a price cap in the domestic market for several years, recent events have underscored its limitations in shielding consumers from extreme market volatility.
The debate surrounding the need for financial support or government intervention persists.
UK energy landscape and anticipated changes: Wholesale energy prices, integral to both domestic and business energy costs, are inherently volatile. A myriad of global factors, from pandemics to geopolitical tensions, contributes to this ongoing fluctuation. While experts anticipate prolonged high prices, signs of a potential reduction might emerge later in the year, contingent on global stability—a precious commodity in the current landscape.
The government’s role remains pivotal. Despite major energy companies reporting substantial profits, the reluctance to intervene raises questions about the sustainability of the current situation. Energy giants prosper while customers grapple with bill payments, emphasising the need for systemic change.
A vigilant approach is crucial. While some suppliers might contemplate offering better-priced fixed-term energy deals, committing to such deals amid uncertainty and high wholesale prices demands careful consideration.
Meanwhile, it is advisable to take a cautious wait-and-see stance. Experts suggest avoiding a switch unless clear savings are apparent through a fixed deal.
Adapting to the energy landscape – practical steps: Given the ongoing uncertainties, meticulous energy monitoring becomes imperative. Investments in energy-efficient equipment and the adoption of prudent practices, such as turning off power when not in use, can significantly impact bills. Support avenues, such as Ofgem’s schemes, are available for those struggling to meet their energy bills.
Optimise savings and partner with Onebill. In challenging times, every avenue for cost-cutting matters. Onebill continues to offer robust deals for phone, broadband, and card payments. Explore our latest offerings HERE and embark on significant savings for your business in the evolving energy landscape.