With temperatures in March projected to drop below seasonal norms, energy demand is expected to increase significantly. This will inevitably lead to an uptick in wholesale energy prices as demand outstrips supply. Consumers of gas and electricity can expect prices to rise when temperatures drop; usually, when this occurs, gas consumption goes up and pushes up the cost of these resources due to their limited availability. It’s necessary for business owners to be aware of not only the external weather conditions but also those internal market forces that can affect the cost of their utility bills.
Other factors affecting energy bills
In the UK, our lack of storage causes prices to be more volatile as we don't have the option of taking excess gas storage when demand increases. This is why the prices tend to fluctuate quite frequently and energy prices become suddenly much more expensive. This has a detrimental effect on household and business consumers who are already struggling with sky-high prices. To combat this problem, it’s important that we expand our storage capacity so that supplies are managed more effectively, leading to lower and more steady prices in the long term.
Will this affect energy availability?
The UK's energy system is ready for colder prices and the risk of blackouts is low. Smart preventive methods are in place to handle rises in demand if needed. One such method is a flexibility scheme that pays consumers for using less energy when demand is high. To further mitigate the impact of fluctuations. As well as this there are also coal-fueled power plants, which can be activated during an emergency. Thanks to these initiatives, there is not much worrying about future outages.
Does this affect business energy prices?
As the weather cools off, business owners may be happy that their energy bills don't necessarily have to go up in order to combat the chilly temperatures. However, it's important to be aware that if your current contract for business energy is about to expire then the colder weather could have a direct impact on what prices you will be paying for your energy. Therefore when negotiating new contracts, bear in mind, not just the cost of commodities such as gas and electricity, but also variations that colder weather can bring. This is why you should ensure you get prices before they rise any further.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
