Energy Prices: The Unpredictable Storm
Starting with the basics, let's first see…
What are the differences between Domestic and Commercial energy costs?
Even though it's all Energy, there are some massive differences in the consumption of energy commercially vs domestically.
The prices of commercial energy vary based on multiple factors like- its consumption, location, credit score, etc, and due to higher consumption, they tend to be lower than the prices of domestic energy as there aren't any such customisations.
But despite the unprecedented rise in commodity costs in recent months, the OFGEM price cap has protected domestic customers from the full blow of price hikes, making domestic customers realise lower costs than commercial customers since September 2021.
Another difference between the two is the VAT liability and Additional Levies- Commercial customers are subject to 20% VAT, while domestic customers are subject to 5% (as they are protected by OFGEM), also, commercial energy is subject to Climate Change Levy(CCL), unlike domestic energy.
Landing on the Big Question of Energy Price Volatility!
Ahead of World Fairtrade Day, Our Trade and Product Development Manager, Darren Williams shared his experience with energy price volatility.
Darren Williams, Unify Energy, Trade and Product Development Manager
He mentioned, “We have seen an unprecedented surge in wholesale prices leading to the highest prices since market formation in the early 1990’s.
Multiple factors have caused this, global demand for gas has been high as economies emerge from CoVID-19. The UK has been transitioning away from coal, creating greater demand in the UK for gas to generate electricity through lower renewable output in 2021 than anticipated.
Europe relies on Russia for 40% of its gas supply and its invasion of Ukraine has caused disruptions that contributed heavily to this rise and the volatility as even a threat of a shortage dramatically increases the cost. Even though the UK isn’t directly reliant on Russia for its gas, the interconnected nature of global markets means that we are not immune from the rising costs”
What can we do about it?
Regardless of a genuine willingness to do something for climate justice, there are a plethora of options that can confuse and mislead people.
The first step to take is to track the amount of energy consumed, how often, and carefully document any wasted or unexpected consumption. Landlords must be aware that unmetered energy is difficult to track or bill accurately, so moving towards sub-metered infrastructure in the future is the right way to go.
This is something that you keep in mind while selecting your energy supply company because as important as price is, it certainly isn’t the only indicator of value.
Unify Energy is here to help you!
One of our core values is transparency and on #WorldFairTradeDay2022, we wish to tell you how Unify Energy does it.
We specialise in Energy supply in multi-tenanted commercial buildings, the first company in our Industry to bring both Energy to the building and also help you manage it within the building. As your end-to-end partner, we provide a clear view of the energy consumption of the entire space as well as the energy consumed by your tenants separately, making you more aware of your buildings’ energy supply and providing you with the best possible options for conserving energy, without you having to commit a lot of time to it.
Simple and specific steps to track and reduce the amount of energy you use is a sensible way that can lead you to create sustainability success.
