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The Cost Of Electricity: What Goes Up, We Can Bring Down

It’s not good news.

According to a report by the Imperial College of London, the wholesale cost of the megawatt-hour (MWh) has risen to more than £100 for the first time in 30 years.

In fact, today, the average market price has reached an astounding £107.50 p/MWh. Costs are up 14% on July 2021 and – if rates keep rising – there are fears that many families will be plunged into fuel poverty this winter.

So, what does this mean for business fuel rates?

First, we’ll need to look at what’s happening globally.

Why are prices on the up?

Several key factors in the fuel sector are set to leave their mark on commercial and domestic fuel rates:

  1. Energy prices have risen by over 50% in the last six months, this includes petrol and diesel. Diesel costs almost 20p more per litre compares to last year and is at its highest rate in seven years.
  2. From 1st October 2021, the energy price cap will increase
  3. There is a shortage of truck drivers resulting in bonuses for signing up with companies and increases in pay (up to 40% in some cases)

Beyond this, the surge in energy demand post-pandemic – combined with the effect of climate change on global weather patterns – has driven prices up.

How will this affect my rates?

Unfortunately, with wholesale prices on the rise, your bills will make a larger dent in your overheads. To give you an idea: domestic dual-fuel bills are expected to increase by £139 per year, while those using prepayment meters will pay around £153 more per annum.

But don’t worry; Double M Business Services can help in a number of ways:

1. Deals and Renewals

We recently priced electricity for a new client at 17 pence per kilowatt hour (p/kwh); they had previously been quoted as much as 24 pence p/kwh – 30% more!

Many businesses could reduce the costs of new contracts by speaking to us. We are experienced in navigating the sector and can maximise your savings now and in the future. For example, we know that cheaper rates are often offered as introductory deals and inflate after 12 months. However,
we promise to reach out 6 weeks before renewal each year to remind you and offer our brokerage service. It doesn’t cost you to take advantage of our decades of expertise. Rest-assured that we do our due diligence, so you don’t get stung.

2. Energy Optimisation

Our auditors can undertake a comprehensive evaluation of your electricity-related equipment, fittings, and processes and identify areas that are costing you unnecessarily. They will provide an overview of your current costs and estimate how much you can save by implementing their recommendations. For example, could you opt for LED lightbulbs or amend closing-up procedures to include switching electrical equipment off standby where possible.
Not only will this save your business money, but it’s great for the environment and is a demonstrable effort towards sustainability.

Benefit from savings

As furlough comes to an end this month, we anticipate that more people will be looking for work. By keeping the cost of overheads down you can consider using your savings to take on more staff or making improvements to the business that you’ve been putting off.

To find out more about how Double M Business Services can help, get in touch with Mike and Sue here.

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