Energy prices to rise
Now is a good time to review and organize your business energy contracts. We are approaching the end of the year, making it an opportune moment to take care of this task. With the threat of colder weather and less support in 2024, businesses need to be cautious about when they sign their next energy contract.
Energy prices can change in winter when people use more gas because of weather changes. This means that fixing before we get into 2024 could be a better option for your business.
Although global tensions have settled, other factors could lead to higher energy prices in the UK. Global market changes will greatly impact us because the UK lacks energy security.
All these factors along with the threat of no energy support could lead businesses that don’t fix their energy prices to struggle throughout the next year.
Less energy support is available next year
Your business should fix its energy contract before 2024 because there won't be government support next year.
The government said energy consumers may have a hard time this winter anyway without the level of government support businesses had last year. The EBRS, which limited energy costs for businesses last winter, was too expensive to continue. However, it did assist some businesses in remaining open during the colder months.
Although the EBDS, will continue until next year, some say it doesn't protect businesses well enough from high energy bills.
What is The Energy Bill Discount Scheme?
The EBDS is an energy support scheme set up by the government last year to replace the EBRS. This support is designed to protect business customers during price hikes so that companies do not struggle to pay their bills.
The EBDS will add a discount to non-domestic energy bills once they have gone over a certain threshold price:
- For electricity, if the wholesale portion of the bill rises over 30.2p/kWh then a maximum of 1.96p/kWh discount.
- For gas, if the wholesale price rises over 10.7p/kWh then a maximum discount of 0.697p/kWh will be applied.
To see more about the EBDS - continue reading here
The EBDS will stop running in March 2024, after this businesses will most likely not receive any help with their energy bills from the government. This is why it is important to ensure you fix your energy prices with cheaper rates before prices rise in 2024.
How will the Energy Bill Discount Scheme ending impact your bills?
The EBDS ending is going to mean that in 2024 businesses are going to be left with no support at all on their energy bills.
Although the current support is not a lot for companies to lean on there still could be repercussions of it coming to an end for your business such as:
- Ease any cost rises - Having energy support will have eased the thought of energy bills possibly getting more expensive again.
- Businesses must handle high energy costs on their own because of a lack of energy support.
- If your business is currently struggling with energy prices this will only get worse with less support.
Because of these reasons, we would suggest fixing your next energy contract before prices become too expensive and support runs out.
Other reasons to fix your business energy
There are many benefits to fixing your business energy prices such as:
Cheaper energy
As prices continue to rise with colder weather, you could benefit from keeping your energy bills low with a fixed contract.
Gas and electrcity prices often fluctuate so if you keep on top of wholesale prices you will be able to always ensure that you switch at the time when energy is at its cheapest.
Better contract terms
With a fixed rate tariff, you have to pay the same terms until the contract ends. If you sign when prices are more expensive this can incur much higher bills, however, if you work with a dedicated broker or consultant they can help to ensure you always renew at the right time.
Signing a fixed contract could also allow you to benefit from more competitive pricing from suppliers.
No worries about having to switch during a high-price period
As we mentioned before if you use an energy broker or consultant to switch to a fixed-rate tariff you won't have to worry that you switching at the wrong time for your business.
How long should I fix my business energy contract?
When you fix your energy prices you protect your business from energy price rises for the duration of the contract length. When it comes to how long you should fix your contract, this depends on the projected market over the next couple of years.
Energy analysts can predict in the market when prices are likely to rise and fall over the next few years, this allows suppliers to give up to 5 years of fixed prices on some energy contracts.
How long you fix your energy prices should depend on how the current market is looking at that time. For example, if wholesale prices are low at the time of your signing but are predicted to go up, your company might want to sign a longer-length contract to ensure you lock in your cheaper prices for longer.
To make sure you are signing for the correct amount of time for your business you should speak to a business energy consultant. Someone with expert insight into the business energy market will be able to analyse the market to give your business advice on how long they should sign for.
Get cheaper energy by switching to Resolve Energy
At Resolve Energy we have a dedicated team of energy consultants to help you navigate the energy market, to ensure you are saving your business the most money possible.
Our team have expert insight into the energy market and understands exactly when prices are going to rise and fall. We will compare business electrcity and business gas prices from all of the top UK suppliers.
Ar Resolve, we will also ensure that your prices remain protected against market values and take into account what could affect these prices over the next couple of years.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
