We are now deep in the winter months. And for many businesses, even those who dont use gas as part of their core business processes, it means in increase in gas usage and the impact that will have on business energy bills.
Meanwhile the current energy environment is a confusing – and at times contradictory – scenario that includes, on the one hand, falling gas prices; and on the other, fuel poverty and very real rising human casualties. Time, we thought, to investigate:
Let’s deal, firstly, with fuel poverty. The Department for Energy released a report in the summer of this year and concluded over 10% of the UK was unable to afford proper heating through the last winter, a staggering two million households. And the cold, hard fact remains that that contributed to the deaths of an estimated 10,000 people in 2013.
In terms of electricity, the UK still faces supply problems. You may have seen news reports about the dwindling power reserves in this country, and the fact the government is adopting emergency measures to avoid the risk of blackouts this winter. The ability for the UK to produce extra power is the worst that it’s been since 2007 and that is all compounded by the fact we are functioning with a creaking electricity production and distribution infrastructure.
UK gas prices at record low
Now set all that against the fact gas prices in the UK have actually fallen to a record low. The fall is the direct result of the fact that Russia and Ukraine – often at political, and indeed military, loggerheads over energy supply – have recently agreed to an energy supply deal to secure the transit of gas between Russia, Ukraine and the EU, until the spring of next year.
It was the EU that ultimately stepped in to broker the deal between Russia and Ukraine. Sanctions against Russia will remain in place, but the EU will essentially act as guarantor for the Ukraine and its ability to foot the bill. And so Russia has now turned the taps back on, creating confidence in the market that energy security had been guaranteed.
And that had an immediate effect on prices. Last December, gas traded at 54.6p per therm but it recently dropped to 52p per therm, an all-time low since the contract was opened to the market. It is now up a little, to just over 52p per therm.
It is obviously now hoped that the fall will drip down into a reduction in prices at the consumer end of the process, so that in both domestic and commercial settings, there need be less concern about turning the gas on. In the UK, the campaign group Fuel Action Poverty have certainly been successful in lobbying for the Energy Bill of Rights, recently launched in the Commons, with the intention of making energy fairer, affordable and sustainable.
However, although the news from the energy market is positive, we are by no means out of the woods. The polar divide between the proponents, and opponents, of renewable energy sources for instance, remains. On the one side, the environmental lobby continues to advocate environmental concerns around fossil fuels and stresses the need for affordable, renewable energy. On the other, members of government continue to highlight the unsustainability of such sources – not in the energy itself – but the processes involved with its production and distribution.
Buying group prices remain the best
Despite the fact that it remains a mixed picture, we are as confident as ever that you can get the best UK business gas prices anywhere through our gas buying group. Try our calculator and see how much you could’ve saved!
It’s safe to say that energy companies are not everyone’s best friend in 2014. Nor are they top of our Christmas card lists — especially when what the send us back in the post isn’t nearly as welcome. And with findings such as this recent discovery from Ofgem, it’s really not surprising.
Of course a large aspect to the smooth running of the energy industry is the power in the hands of the consumer to switch their energy provider. That’s where Business Gas.com can help, tracking the market to find the best deal for your business, and then facilitating that switch. However, that only works if all parties allow the customer to transfer smoothly to other deals. And it has now come to light that British Gas have been unfairly blocking their own customers from doing so. Many of these customers were small businesses, perhaps much like your own, prevented by British Gas from moving to more competitive deals, and cheaper tariffs, at the end of their contract.
From the very beginnings of evolution itself, and through the passage of the ages ever since, two basic fundamentals have held true. Number one: The big fish get to eat the little fish. Number two: The big fish get bigger. Charles Darwin knew this… even if he was less sure as to how to keep his beard trim.
So the bottom line is that we are better, from an evolutionary standpoint, when we are bigger. This is also true from a military point of view… and also an economic. People… SMEs… even corporations… have always pulled together, to pool resources and work towards common goals; figuring they are stronger when together. It is also true from the standpoint of nations, for instance with the “Better Together” campaign for a “no” vote in this year’s Scottish referendum.
Lower gas rates – GUARANTEED!
Up until now, your gas will have been priced on general usage throughout the day, with no differentiation between usage patterns during that time. Accordingly, your gas supplier will price your contract based on just daily usage. However, when you look into the main usage patterns for most restaurants, they are not the same as other standard UK businesses who trade between 7am – 5.30pm. In fact, most restaurants do their business between the hours of 11.30am – 2.30pm (Lunch time) and 6.30pm – 11.30pm (Evening Dining).
When pricing gas, the suppliers normally take into account the ‘Triad’ period, which is when energy is at peak capacity. In easy to understand language, the ‘Triad’ period spans peak times during the day/evening when, for example, kids finish school or people arrive home from work. Therefore, between 3.30pm – 4.30pm, across millions of homes in the UK, lights are switched on. When it’s cold the heating also goes on, even before a PC or Xbox is powered up. Another typical ‘Triad’ period is between 5.30pm to 6.30pm, when the main body of commuters arrives home from work. Again the UK reignites, sending energy demand through the roof. During these ‘Triad’ periods, your energy can cost two to three times as much than at any other times during the day.
The decline in carbon energy resources, combined with volatility in the oil market has led to ever more ingenious methods of energy extraction. And one method aimed at reducing business gas prices is the process of hydraulic fracturing, or “fracking”. Developed in America, fracking involves the rupturing of rock to allow for the natural shale gas to escape. As this process involves pumping water, sand and chemicals deep into the bedrock, it is not without controversy, especially when fracking in the North Sea created minor earth tremors in the Morecambe area last year.
On the plus side, there is estimated to be one thousand trillion cubic feet (tfc) of shale gas in the UK – some argue that’s enough to make the country energy self-sufficient and business gas prices to come down. And more is being detected all the time. A recent British Geological Survey revealed that the shale gas reserves around Blackpool were actually 50% bigger than estimated. Such resources could potentially carry huge benefits to all energy consumers, in terms of steady business gay supply and therefore lower costs.
Smart meters are the next generation of utility metering technology, doing away with inaccurate and misleading estimated bills. Smart meter readings are 100% accurate and your bills are based on real time energy consumption information.
The great advantage of gas smart meters is that they can provide accurate, right up to the minute usage data, from any meter, at any time. This through a system called AMR (Automated Metering Reading) and, unlike traditional meter reading companies, there’s no need for a meter reader to physically visit your business to get your usage information. This means a better, more accurate, more frequent and cheaper service than previously possible.