After a turbulent 2021 for business energy users it looks like the rollercoaster is continuing into 2022 - it is not so much Happy New Year as hold on tight.
Here are some of our thoughts on what sort of year 2022 is shaping up to be on the business energy front. As with most years we think there is some good news and some less good news.
Firstly pricing. We can’t avoid this - it is the issue that has plagued the energy business and its customers for pretty much the whole of 2021, and there is no sign of a change on the horizon.
With new record gas wholesale prices being set almost every week - 20 times higher than six months ago in some cases resulting in a 300 per cent increase in the cost of energy for some business clients - the future looks bleak for many.
In our view the Government needs to step in or we expect some successful businesses will become no longer viable because of the huge increase in their energy bills
At the moment around 70 per cent of a business energy bill is made up of taxes and levies that are government-influenced and which can be eased really quickly. Six years ago only 30 per cent of the bill was affected by taxes and levies. That would be a quick win for the government and ease the crisis for business owners.
We are now in a situation where energy suppliers won’t even provide a quote for a renewal or a new contract until at least March because the market is so volatile the price changes before they can get the contract signed.
Something needs to be done to manage the costs and create a stable environment for gas and electricity supply so we can return to some normality around pricing.
If you have a business energy contract that comes to an end in 2022 then it is not going to be such a Happy New Year - the best advice we can offer you is to brace yourself for a massive increase in your costs.
We are hoping that things have improved by later in 2022 for any of those businesses that have renewal dates in 2023, but there is no guarantee of that.
If you are not on a contract and just paying the variable rate then just do everything you can to save on your energy use - turn down the heating, turn off the lights and so on. Very few suppliers will take you on to a fixed contract at the moment. The choice is to hang on until there is more choice and better prices, or else tie yourself into a horrendous rate for a year to give you some certainty.
Analytics and monitoring for Net Zero
There is some better news for 2022 we think. And that is the focus on energy efficiency, cutting carbon and getting on a pathway to Net Zero will become more and more important for business during 2022.
The key focus for business will be getting greater visibility of their energy performance through enhanced analytics of what they use, where they use it and how they can be better at managing it.
Our own Total Energy Analytics system is breaking new ground in the visibility of all aspects of energy use that it gives to business owners and managers. Executive teams and boards are demanding to see what businesses are doing to achieve Net Zero and analytics is the way to show what improvements are being made.
Happy New Year
It looks like 2022 is going to be as tough a year as 2021 has been in the business energy sector - certainly for the first six months at least.
As always, we are on hand to provide the impartial and reliable advice that you would expect of us as the UK’s Most Trusted Business Energy Consultancy.
Whatever the problem you are facing - with a renewal or you just need advice on what you can do to manage the increased costs of your energy use - get in touch with us and we will help wherever we can.
It is going to be a rough ride at times in 2022, but if we are by your side you will know you have got the best advice for getting through it.
Happy New Year!