As colder weather increases gas for heating demand, other supply and demand indicators remain favourable.
The end of heatwaves in Asia and the completion of maintenance in Norwegian gas fields have boosted both pipeline and liquefied gas supplies, while European gas storage levels are at 95%. Additionally, high wind generation has reduced gas for power demand.
Elevated rates
Despite these positive developments, commodity and contract rates remain elevated. The risk of a sudden and severe reduction in gas supplies continues to be factored into pricing by both commodity markets and suppliers.
Energy contracts come with significant risks. In changes of tenancy, suppliers are demanding more documentation, such as leases, business rates, insurance, and photo ID, with EDF now requiring a solicitor's letter to confirm changes as genuine.
Additionally, many operators are now facing the consequences of contracts agreed 18–24 months ago, with 3- 4 years terms which are set to take effect with rates as high as 17p per kWh for gas and 78p for electricity. These crippling rates are prompting operators to seek alternative contracts, often with their existing supplier who will block the switch. Only to find large penalties are hidden in both the new supplier's terms and broker agreements.
Informed choice
In one case, a larger consumer faced £55,000 in penalties – £46,000 to the supplier and £9,000 to the broker. Despite these costs, a new contract was still more advantageous. None of these risks were explained during the high-pressure sales process, which urged the customer to "fix now" under the guise that prices would only rise further.
Any operator looking to agree or renew energy contracts should get confirmation if non-go-live or early termination fees exist and if so, what they are from both supplier and broker. Don’t accept what sales agent say but ask explicitly in a recorded call or in writing. Alternatively, use a trusted partner who doesn’t impose such costs and who will detail the risks and charges from different suppliers, allowing you to make an informed choice.
Nationwide Energy can provide a consultation, a market review and bespoke prices. Contact us on 02476 328995 or at info@nationwide-energy.co.uk. Also, see here for a free guide to help your business.
