'Energy commodity costs may fall further'

In the past six months, the range of movement has been relatively limited. However, with suppliers delaying passing on the savings contract rates have fallen more slowly.

It’s only in the past three months that contract offers have remained fairly level. Costs increases from the low point in March reflect several factors including global LNG supply and demand, European gas supply and storage levels, temperatures, and renewable generation.

Commodity costs may fall further, perhaps closer to the pre-pandemic long-term averages. The challenge, particularly for electricity is that non-commodity costs are set to rise over the next 3 years to around 13.5ppkW on average. Therefore, it’s difficult to see a rate below 20ppkW, before​ supplier charges. Arguably there is equal upward and downward pressure on electricity costs. On that basis, a two or three-year contract may be a better option.

When considering contract offers operators must be aware of key supply terms and conditions. There has been a recent trend where suppliers are leaving more non-commodity or “pass-through” costs as variable and in some instances, this can mean an extra £4 per day or £1,000+ onto annual costs, once the contract is in place. In any comparison of rates, it is crucial to factor that in, as a fully fixed offer that’s slightly more expensive will be better value. If shopping around, note that some suppliers structure quotations in a way that these variable charges aren’t as clear as they may be. It’s crucial to get a fully inclusive costing for comparison purposes.

Nationwide Energy’s field consultants and renewals advisors can provide customer-focused advice, a market review, and updates on available prices. Any customers struggling to pay current rates or who are at risk of default can contact our Billing Team for support and advice on their options. Please contact us on:-

Tel: 02476 328995

Email: vasb@angvbajvqr-raretl.pb.hx​

https://nationwide-energy.co.uk/free-guides-to-help-your-business/​