Why energy price rises? EPS explainerEfficient Power Solutions

Price Rises, but why?

Price Rises, but why?

Despite being the only one of the Big 6 not to raise prices last winter, since they announced their own price rise last week, British Gas has felt the full force of the media. However, parent company Centrica saw a jump in its share price, which had been dropping steadily for a couple of weeks, and this has held through to today. Profits remain high and the city is happy.

Realistically it’s only consumers that will suffer; nothing new there then. However, with British Gas being as strongly self-justifying as the criticism is vocal, what are the facts behind the argument and what can you do to protect yourself from more of the same?

Shifting Sands

We’ve written before that energy bills in the UK are complicated. Much of this is down to complex taxation, the so-called ‘green-taxes’; transmission and distribution charges. In race for transparency, perhaps in order to shift blame away from large profits, bills often contain minute detail. British Gas has squarely laid the blame for the increases at the door of such elements and, to a degree, it’s true. But, whilst the focus in recent days has been about impact on domestic bills, it will be the Industrial and Commercial sectors that bear the brunt.

Due to legislation, the supply sector has been forced to change. Not only have we seen the death of the coal-fired power station, we’ve seen a shift towards renewable generation both on a large and small-scale. For electricity at least, self-sufficiency is available. However, that means that an increasingly demanding grid has to be funded by theoretically fewer consumers. British Gas are therefore correct, rising bills are not their fault, well, not entirely.

Public utilities and private sector

Although sold to the public as a means of driving efficiencies in a duo-polised sector, one of the main reasons for privatisation of the utilities was the requirement for investment. Getting the private sector to stump up the cash was a political master-stroke. In the near three decades since privatisation, successive governments, protected by the OFGEM buffer, have been able to blame the suppliers for every single price rise, many of which are down to taxes brought in by legislators. However, the suppliers have become huge corporate entities, with profits to match, and therefore a target for public ire.

What can you control?

Energy is as much a resource as anything else that your organisation uses. No efficient manufacturing company would use any more raw materials than are strictly necessary to make product, so why would you use any more electricity or gas than you needed? Local generation takes many forms, and if that’s not practical, then energy efficient technologies are readily available.

What is sometimes lacking is knowledge or time, and that’s where Efficient Power Solutions can help. We’ve got the expertise to walk you through the assessments needed, look closely at what you’re doing and bring things to fruition, give us a call.

For unbiased advice on any of these topics, contact Dave or Kevin at Efficient Power Solutions on 01909 569016.[/vc_column][/vc_row]