Business electricity users should brace themselves for higher business energy charges than previously expected after a bleak forecast from energy regulator Ofgem, according to the Energy Advice Line.
The UK’s leading business electricity price comparison and switching service for business urged firms to shop around and lock into the best available deals following Ofgem’s warning that faces a significant threat of power cuts and price rises over the next three years.
Ofgem said spare energy capacity, known as the margin, was set to tumble from current levels of 14% to just 4% over the winter of 2015/16, as ageing coal and oil-fired power plants were decommissioned as required by European environmental legislation.
According to Ofgem’s analysis, released last week, this would increase the risk of power-cuts to 50% in 2015 if a very cold winter increased demand for electricity. It could also result in “controlled disconnections” of homes and businesses and place extra upward pressure on energy prices.
The average household dual-fuel gas and electricity bill is currently at a record high of about £1,300 per year and had been forecast to rise over the next few years even before Ofgem’s warning.
Julian Morgan, managing director of the Energy Advice Line, said the Ofgem analysis was more bad new for business electricity and business gas users who were already struggling with record-high energy prices.
“There’s no doubt that narrower margins mean that the risk of power shortages are higher, and when energy is scarce, prices can go up as well,” Mr Morgan said.
“Security of supply is crucial to the business community, and therefore to the economy, and I hope the government examines closely the implications of Ofgem’s warnings.
“In the interim, it is essential that firms make energy an absolute priority. It’s crucial that if an organisation’s fixed-term energy contract is coming up for renewal that it gives notice that they wish to leave their current supplier.
“Many firms don’t realize they need to do this in a timely manner to avoid being rolled over onto an expensive out-of-contract rate.
“They then need to shop the market and find the best available deal that’s appropriate for their businesses. This is where we can really help and every day we same firms significant amounts of money.”
The Energy Advice Line is the only independent business electricity price comparison and switching service in the UK designed exclusively for businesses. Firms can view the five most competitive energy offers from the UK’s leading suppliers online, compare prices against their renewal quotation and switch at the click of a button.
The Energy Advice Line’s expert team can also offer advice on how to switch suppliers, as well as a renewal reminder service to ensure you do not get caught in an expensive business energy rollover contract.
For more information visit www.energyadviceline.org.uk