Wholesale Business Electricity Prices Rise
The recent hot weather has seen a sharp rise in the wholesale electricity prices for both business users and domestic use due to a variety of reasons.
The recent hot weather in the UK is something that we all enjoy but a few conditions has seen the wholesale electricity price jump to the highest levels in the UK not see for the past 17 months. The issues in the UK are because more people are using electrical air conditioning systems and fans to cool themselves in offices and in peoples homes. In France they have other issues because most of their electric power is generated from nuclear power stations and these need water to cool the systems. Of course with higher temperatures the water supply is warmer so the nuclear power stations are not operating at their maximum capacity.
Will this increase affect business energy tariffs ?
Although the wholesale price has increased it is not thought that this will have any impact on general business energy tariffs for gas or electricity or business users in the short to medium term. It really comes down to demand but if this trend continues (for long periods of hot weather and more and more people and businesses using air conditioning) then the rates may rise.
The wholesale prices normally peak during the dark and cold winter months when the demand for heating and lighting is at is greatest which would normally happen during January and February. The wholesale prices and demand have been flat or even reduced recently because economic demand during the recession has reduce because manufacturing has not required as much power to run machinery.
Should I renew my electricity contract now ?
We always advise businesses to get new quotes each year when their contracts are coming up for renewal as it is thought that as many as 80% of businesses simply allow their tariff to roll over to the next year. This will happen automatically if you don’t renew and for most people this will see increased rates.
As business users have fixed term and fixed rate prices in general a wholesale price rise now will not affect your contract. You may want to undertake additional research into having a longer term contract. Certainly for some of the big energy companies you can opt for two or three year contracts although the prices may be higher than a one year contract.
Longer term it is forecast that energy rates and prices can only rise and with the additional charges for renewable energy legislation commitments also included now may be a good time to look at a longer term fixed rate contract. It’s easy to renew or switch your supplier if you want cheaper rates and the best way to start is to get an online quote from British Gas (see the special offer below). This only takes around 60 seconds as you just need your postcode and some other basic details about your business. You’ll then be presented with the tariff options that are available for your business at the consumption levels you are predicting. Do you have a minute now? Why not get a quote and see how much cheaper the rates are from what you are currently paying ?
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