CONTENTS
Letter from the Editor
A new year’s resolution
When a Fixed Energy
Contract isn’t Fixed
Welcome to the first edition of the SYNER-G
e-magazine. In these pages you’ll discover our
pick of the past three months’ news, features and
advice around business energy procurement and
management, from information on how to pick
the best type of energy contract for your business
to the pitfalls of DIY energy management.
We uncover the hidden charges that could be lurking in your ‘fixed’ contract
04
The close of 2013 saw rising energy prices hit the headlines, with
Labour claiming earlier this month that energy firms are inflating
energy prices to increase profit margins. As businesses look to start
the new year in a strong financial position, now should be the time
to take a look at whether you’re getting a good deal on your energy
contracts and how you can manage your energy more effectively.
New year is also a better time than ever to make a resolution to
get to grips with the energy marketplace – for example, do you
know what factors which make up your energy prices? Do you
understand Electricity Market Reform and the recent changes to
the CRC and how they may affect your organisation? By gaining
a better understanding of the energy industry, you can be better
positioned to mitigate rising energy prices and find the best energy
contracts on the market.
Smaller businesses, schools and member organisations can use
the new year as a chance to explore cost-cutting initiatives such as
collective energy buying, which will enable them to increase their
purchasing power and provide them with better opportunities to
get the best energy deals. Our animation on page X explains the
details and the benefits.
08
06
www.energ.co.uk/procurement
01
10
AT A GLANCE: WHAT FACTORS
MAKE UP YOUR ELECTRICITY PRICE?
www.energ.co.uk/procurement
YOUR COMMERCIAL ELECTRICITY BILL DOESN’T JUST INCLUDE RAW ENERGY COSTS. HERE ARE SOME OF THE
OTHER FACTORS THAT GO INTO THE PRICE OF POWER AND THESE ARE INCREASING YEAR-ON-YEAR!
Wholesale energy
Wholesale energy makes up 50-66% of your total electricity bill
WHAT FACTORS MAKE UP YOUR ELECTRICITY COSTS?
A variety of factors make up UK business power prices. Here are some of them:
Amount paid on average by medium-sized businesses per MWh for wholesale electricity: £54
DUoS
BSUoS
Feed-in-Tariffs
Once the electricity has reached the high-voltage substation, it is distributed to the customer’s premises, which also
involves fees. These are fed through to business energy prices in the UK.
HDCA
Climate Change Levy
Increase in total revenue of the UK’s electricity distribution industry in 2013-14:
GB average TNUoS
Renewables Obligation
2.6%
TNUoS
Energy generators and suppliers must use the electricity transmission grid to get power across the country to a local
distribution point. The costs for this are passed to the customer.
Half-hourly meter costs have increased
The Challenges
of Managing Your
Own Energy
10.0
by 10%
BSUoS
Energy generators supply energy to the national grid and take it back from the grid when needed. Keeping the system
in balance costs money. Energy companies pay a Balanced Use of Service payment, and pass it on to you.
8.0
12
6.0
p/kWh
Whether your energy contracts are due for renewal soon or not,
now’s a great time to reassess your organisation’s energy strategy
and look towards cutting costs in 2014. Happy new year!
Wholesale Power
GB average DUoS
4.0
2.0
HDCA
The HDCA is a charge paid by all electricity users in Britain to supplement the high costs of power distribution in
Scotland.
These charges have increased
by 20%
RO
14
Energy providers have mandatory renewable energy targets, but renewable energy is expensive to produce.
Customers pay for it, in the form of increased business energy prices from renewable obligations (ROs).
RO charges have risen from 0.643
p/kWh to 0.865 p/kWh
Feed-in Tariff (FiT)
The Feed-in Tariff (FiT) is a levy on UK energy users, to subsidise those people who choose to produce their own
energy and share it with the electricity network.
FiT charges have increased
by over 15% to around 0.25 p/kWh
CLIMATE CHANGE LEVY
The Climate Change Levy is effectively a tax on fossil fuels, paid directly by businesses in the UK.
CCL charge is currently 0.524 p/kWh and set
Find out more - download our eGuide
to rise to 0.541 p/kWh by 2014