Despite wholesale energy prices being at their lowest since the middle of 2022, they still remain high. These high prices are worrying for UK households and businesses. Demand is increasing, there are storage constraints, and energy supplies remain limited. Yet, there are some positives to draw.
Compared to this time last year, there is less reliance on gas from Russia. Winter has also been kind in 2023. You can add the government’s Energy Bills Discount Scheme (EBDS) scheduled to run until the end of next March to these factors too. The EBDS offers universal discounts on non-domestic energy.
The Energy Price Guarantee Scheme (EPGS), which caps average domestic energy amounts at £2,500 each year, ended on July 1, 2023. Due to current energy price decreases, Ofgem’s price cap adjusted to an average bill of £2,074 per year from July when the EPGS concluded. This doesn’t affect how much energy businesses consume, though.
As things stand, the current nature of energy supply and demand means price changes for consumers are not reflecting quickly.
As mentioned above, Europe, in general, has experienced a temperate winter. Businesses are making attempts to become more energy efficient due to escalating gas and electricity costs. With these factors combined, energy demand has dropped and the unit cost of both gas and electricity has reduced.
The energy market in the UK and across Europe is also experiencing something of a cooling-off period after the Ukrainian invasion and the Nord Stream 1 closure. Countries across Europe are making new energy plans by using renewable energy sources. They are also storing more liquified natural gas.
With spring and summer upon us, we should expect further gas and electricity supply price decreases.
Wholesale energy prices may have dropped recently, but your bills will remain expensive. Hence, it makes sense to carry out a business utilities comparison. Use energy brokers and consultants to find the most suitable energy contract for your business moving forward.
