Why SMEs should switch energy providers?

by Amyy March 8, 2022, 12:25 am 44 Views

At Discount Hub Ltd, We have written some key points and situations on the current state of the energy market to help clients understand why SMEs should switch energy providers and in their decision making. The reality is that the world’s leading analysts do not have these answers; however, We hope the points below provide some guidance to help customers decide when to insure their energy contracts.

Key Points

SMEs have been forgotten in the media
Prices could still rise significantly in the coming months, so find out where you stand now, for the future!
Understand their terms and conditions
Consider long-term contracts to help with short-term cash flow

The question on everyone’s lips, from those running small businesses to the UK’s largest production facilities, is of course hire/buy now, or do we wait?
Our suggestion is that the prices will stay high, but my concern for customers is that the primary media focus is on immediate energy prices and national energy price cap increases, which could put light on the reality of the cost increases that companies could face. With 99% of UK businesses (and 60% of employment) being in the SME sector, it is critical that these customers are supported and educated to make informed decisions.

Businesses should remember that they are not covered by the national cap and that the current plan proposed by the government to support the domestic market is simply a loan scheme to help clients’ short-term finances (will recover in later years). With this in mind, support for the commercial sector is highly unlikely.

Like many industry parties before Christmas, companies hope that the European conflict will be resolved and prices will fall. While they might drop slightly, there is also a real risk that they could rise exponentially to new all-time highs.

If tensions with Russia subside, questions remain over whether and when Russia will increase non-contracted gas flows to Europe, or whether it will continue to withhold gas to push for approval of the Nord-Stream 2 pipeline to Germany.

Want to read about How Ukraine and Russia war affect the energy markeet?

Questions come to mind in this war-like situation

So should companies be buying?

Unlike the domestic sector (which is currently uncompetitive due to the price cap), there is value in price-seeking companies. While some providers have reduced their activity in the market, others that have positioned themselves well are using this as an opportunity to acquire new clients.

The time has come for companies to plan for future costs?

Most importantly, companies need to understand what their future costs will be now. While you can choose not to sign a new contract just yet, I absolutely recommend companies find out now what their future prices will be based on today. Energy contracts can be secured up to two years in advance, and while you’re unlikely to find savings, securing a contract now could prevent your business from growing any further.

Here is the current market situation that affects price changes in energy markets:

One of the big reasons is additional industry charges

Outside of wholesale prices, the bankruptcy of 28 energy providers in 2022 has left a debt to the industry, which could reach £2bn of unpaid industrial charges. This value will be mutualized among the remaining energy providers, who will pass on this cost to end-users where they have the opportunity.

Russia/Ukraine conflict

One of the key drivers of energy prices right now is the limited amount of gas being delivered from Russia to Europe, compared to what they are capable of delivering. This is unlikely to change until (and if) Nord Stream 2 is approved to send gas to Germany.

It is now clear that the movement to decarbonize the UK (while essential for our environment) has progressed too quickly, leaving the UK without (continuous) baseload generation to support demand when renewable solar and wind are not producing.

Supply of Demand

Since the closure of Rough, a gas storage facility, the UK has no gas storage capacity and is therefore dependent on European storage levels, which are at record lows. On average, 40% of UK electricity is still generated from gas, meaning electricity prices will continue to be driven by the gas crisis.

Save money on business electricity

The livelihood of your business depends on your electricity supply. That doesn’t mean you have to overpay for your company’s electricity. The easiest way for a company to reduce its costs is by switching to an appropriate rate based on its use.

Many companies feel that switching providers is a complicated process. But discount hub ltd Savings makes the switching process easy and valuable, saving your business hundreds of pounds each year.

With so many providers to choose from, finding great deals on electricity for your business can be overwhelming. That’s where Savings can help!

We compare hundreds of rates in seconds, giving you instant access to amazing deals. It’s all online, so you can choose your provider, rate, and track your change.

Saving Tips For Business electricity

Use electricity from renewable sources:

By switching to renewable energy resources, you don’t have to pay the climate change levy, which is a tax that businesses need to pay for their energy. Learn more about the climate change levy. To find out more about renewable energy, contact our green business energy expert.

Sign up for a smart meter:

A smart meter does all the work for you, meaning you don’t have to carry out regular checks on your electricity meter yourself. This meter will monitor energy usage and send the readings directly to your energy supplier, making your business electricity prices more accurate, as well as reducing the chance of you having to pay the odds.

Compare quotes before your contract ends:

It is important to shop around to compare business electricity rates before your contract ends. The best time to start looking is six months before the end date. We can provide you with Market Competitive Price Comparison for Electricity and Gas with all the Best Suppliers in your Area, Most Importantly Keeping in Mind your Business Needs.

Discount Hub Ltd Services

Discount Hub Ltd operations are customer-centric, we make a commitment to each and every business that we will provide award-winning service, value for money, and quality expertise at every stage of the process.
At Discount Hub Ltd we offer you expert advice. Our advice is aimed from Small Business Energy ,Large Business Energy , and corporate sectors to Care homes, Sports Clubs, and Manufacturing.

Traditionally, European storage gas is filled in the summer and withdrawn in the winter. With the lack of import of gas from Russia and the expectation that it will not be imported during the summer of this year, this means that prices will continue to increase significantly for the next few years.

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Written by Amyy

How Ukraine and Russia war affect the energy markeet?

Russia’s recent attack on Ukraine has rattled global commodity markets and raised concerns about how the ongoing crisis could prolong Europe’s energy crisis as the West continues to impose sanctions on Moscow. While the impact on energy markets has yet to be determined, wholesale prices increased 30% on Thursday, February 24, and continue to rise.
Russia is one of the world’s leading exporters of coal, wheat, palladium, and ammonium nitrate, as well as many other resources. Russia is also the second largest producer of gas and the third largest producer of oil in the world.
The UK only depends on Russia for 3% of its gas, which is much less than Germany and Italy, which are much more dependent. If the conflict drags on and Russia reduces or even stops gas supplies through Nord Stream 1 or other pipelines, this could have a devastating impact on energy prices.

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How much will prices go up?

Consumers are already paying high prices for energy and fuel, and demand has increased following the easing of COVID restrictions. The impact of this has seen 28 energy providers go out of business by the end of 2021. The UK’s inflation rate is 5.5%, the highest in 30 years. Although the UK is not heavily dependent on Russia for gas and energy, there are concerns that sanctions could restrict supply and drive up prices around the world. The price of UK natural gas futures soared nearly 30% on Thursday.

Ukraine And Russia war Affect Energy Markeet Discount Hub

Investec said the conflict, coupled with rising global demand, had caused gas and electricity to soar. However, Investec said prices had risen further following the Russian invasion of Ukraine and would remain high for months.
The Kremlin’s latest decision to deploy forces to Donetsk and Lugansk, two breakaway regions in eastern Ukraine, has triggered market shocks and spikes in commodity prices. This week, the price of crude oil reached the highest price since June 2014, reaching almost $125 (£94) per barrel, coal and energy prices soared. Energy experts say oil prices could easily rise another $20 a barrel if Putin seeks to occupy more or all of Ukraine. Such an outcome would also cause huge problems for Western oil companies doing business with Russia.

customers is that the primary media focus is on immediate energy prices and national energy price cap increases, which could put lights on the reality of the cost increases that companies could face. .With 99% of UK business (and 60% of employment) being in the SME sector, it is critical that these customers are supported and educated to make informed decisions.
Businesses should remember that they are not covered by the national cap and that the current plan proposed by the government to support the domestic market is simply a loan scheme to help clients’ short-term finances (will recover in later years) . With this in mind, support for the commercial sector is highly unlikely.
Like many industry parties before Christmas, companies hope that the European conflict will be resolved and prices will fall. While they might drop slightly, there is also a real risk that they could rise exponentially to new all-time highs.
If tensions with Russia subside, questions remain over whether and when Russia will increase non-contracted gas flows to Europe, or whether it will continue to withhold gas to push for approval of the Nord-Stream 2 pipeline to Germany.