The current energy crisis has shone a harsh light on the UK’s energy supply and the response of the markets. Domestic consumers have been protected from recent sharp increases by a government price cap. Such legislation is well-intentioned to limit escalating household bills but has been directly responsible for the recent slew of energy companies going into administration.
There is no such protection for commercial customers. Will energy companies attempt to offset losses from domestic customers by increasing margins on their commercial contracts? How long will the current crisis last? What will be the impact of the move towards increased electrification? Are today’s prices actually ‘the new normal’?
Should commercial businesses commit to long-term fixed price deals? Will these roll-in anticipated price drops in future years offering a better price now?
And are there other strategies businesses can adopt to insulate themselves from a volatile energy market?
In this briefing note, Locogen’s John Maslen in collaboration with a number of industry experts explores the current situation facing UK Industrial and Commercial businesses including market drivers and how they could impact on the energy market going forwards. It highlights alternative pathways towards greener, more predictable and more affordable energy bills.
It considers Corporate Power Purchase Agreements (CPPAs), increasing energy security through private wire options and on-site generation and the opportunity for companies to become flexible ‘prosumers’ – actually turning the energy supply paradigm on its head to create new revenue streams.
The future of energy supply may be unclear but what is more certain is the need for commercial energy consumers to consider all of their options and ensure they manage their risk of exposure to future market turbulence.