Why is the Price of Energy Rising?

Most people probably don’t look too closely at their business energy bills and unless the price rockets, they will probably pay them without much scrutiny especially if they are busy. However, customers may want to look at their bills more closely in the next few months as energy contracts continue to increase in price, with electricity set to rise by 10% this year and gas by 15%. This is mainly due to an expected rise in the wholesale price of energy, which makes up 40% of an electricity bill and 70% of a gas bill.

Reasons for the rise

This spring has been one of the coldest on record in the UK.  Usually we’d all be turning off our home and office heating at this point, but not wanting to freeze has meant that consumption has stayed at winter levels whereas by April it usually starts to dip. Also, due to a drop in wind generated energy, the demand for more expensive fossil fuels has increased so wholesale prices have been pushed up. The combination of these factors means that a rise is very likely.

Uncertain times

On the other hand, there is also a lot of uncertainty in the market regarding Covid. The current surge in cases in India could send the wholesale cost of fuel downwards, which could mean cheaper bills in the longer run. However, this may be offset by other international market forces which are more likely to increase prices.

How Comms Connect can help

Whatever the ups and downs are of the energy market, Comms Connect can still offer your business a competitive tariff due to our bulk buying power – contact your account manager today on their direct line. If you are not currently a customer simply call our main number and ask to speak to sales about energy on 0345 370 5000.

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