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…and just like that, it was February.

 

Welcome to the second edition of, ‘A Month in the World of Energy!’ 

To recap on last months blog, we provided you with a brief look at the market price movements for the Winter period 2020, ranging between April and August 2020, which turned out to be quite a dramatic ride with the UK Lockdown. Moving forward we will be providing you with a look back at the month just passed, as well as sharing with you our insights on the month ahead. 

So, on that note, how did January look? 

Well it started on a high…literally. On the 4th Jan the price of power sat around £61.50 /MWh (for the trading period March 21)whilst gas hovered around 55.04p/th (March 21). Energy prices were impacted by the news that oil output was under threat of being capped in February, meaning there was an uplift in commodity charges, and it was this, as well as the rise in coronavirus cases following a new variant, and below average temperatures, that resulted in higher than anticipated energy prices. 

By the end of January things were looking a little mixed, with power ending the month at £62/MWh, 50p higher than it started, while gas dipped very slightly to 54.5p/th.  

Overall, January was not the most exciting month but compared to the last blog, this one showcases the movements we see in a single month rather than over a larger period of time, meaning more stability would be expected. 

This means that the difference between buying your power and gas for March’21 at the start of the month, against the end of the month was pretty negligible, however by referring to the graphs below, you can see there was quite significant dips and rises within the case of a few days on both Power and Gas during the first week of Feb, something consumers could take advantage of with the right advice. 

And so moving forward to February… 

The graphs below represent the swing in commodity costs, again for March’21 between 01/02/21-05/02/21: 

 

          Graph A

 

                              Graph B           

 

Graph A shows that within a 5-day date range (01/02/21-05/02/21), the market appeared fairly stable, with only a £1/Mwh reduction between the 2 dates, however the difference between 01/02/21-02/02/21, saw the market drop by £3/Mwh overnight which equates to a 5% reduction, before steadily rising again. Whilst a weekly review of prices may have led customers to believe there’s been no real movement, a more strategic view involving in-day analysis could have reacted to the 5% drop.

To put that into perspective for a Manufacturing company using 250,000Kwh (250Mwh) within the month of March’21, if they’d have purchased their volume on 01/02/21, their energy cost would have been £15,000, however to purchase the same volume the following day it would have cost £14,250, which evidences the 5% saving.

If the same pattern was replicated across a 12 month period for the company, it could theoretically achieve a £9,000pa saving by adopting a more strategic approach with a consultant who is pro-actively monitoring the market on a daily basis, rather than offering high level monthly overview.

This is something we pride ourselves on offering at Experienced Energy Solutions and creating a strategy of this nature doesn’t have to be time consuming as we monitor the market on your behalf, only making contact when agreed triggers are set and hit by market movement.

To understand more about how this approach could benefit you and your business, please don’t hesitate to contact us at hello@experiencedenergy.co.uk or by calling us directly on 0121 274 3573

As a microbusiness owner, are you hesitant to work with a broker when renewing your energy deals, for fear of hidden charges and commission fees? The latest Ofgem announcement may help make ‘rogue brokers’ a thing of the past.

At Experienced Energy, we are proud to be considered a fair, open and transparent energy broker. Unfortunately, we are all too aware that there are some energy brokers on the market that are not as clear in their methods of communication with customers, which often leads to miss-sold contracts or incorrect advice being followed. We are therefore pleased to see that earlier this month, Ofgem proposed a series of new regulations which aim to protect our smallest businesses from getting trapped in bad energy contracts.

Our Operations Director Craig Watson believes the movement is long overdue but thinks brokers can still do more in the short term to make immediate changes.

The reason we exist as a business is to try and support the many businesses across the UK who aren’t receiving the best advice from companies they trust. There are far too many companies out there using brokers and they aren’t aware of how brokers earn their commission, and whilst that remains the case, it’s impossible for customers to validate whether they’re getting a good deal.

Our ethos is to be open, honest and transparent with every conversation and we’re comfortable in recommending to our customers that they benchmark our services, as we truly believe having more than one broker in the conversation will increase the chances of getting the best advice’

If you run a microbusiness, the proposals in this latest policy consultation would protect your company from those dishonest brokers on the market who aim to make a big profit at your expense. Ofgem are supporting small businesses to access brokers who are reputable and provide true value for money.

The proposals set out in the Ofgem policy consultation include;

Suppliers to only work with brokers that operate in a fair and honest manner, who are part of an independent dispute resolution scheme.
New sales and marketing rules for suppliers and brokers to ensure customers are fully informed when selecting a contract.
Brokers required to be open and transparent about commission payments.
Introduction of a 14 day cooling off period for microbusinesses when starting a contract.
Introduction of 30 day contract extensions if a supplier switch is blocked.
Removal of the requirement for microbusinesses to give suppliers notice of intent to switch.

The proposals aim to create a more open and transparent market for energy deals, and will place microbusinesses in a much better position to get the best deal possible. This is incredibly timely, with many microbusinesses planning their recovery from the largely disastrous impact of COVID-19.

The only drawback as of today is the fact proposals are currently subject to consultation, and set for implementation in 2021, which leaves the rest of the year still free for bad practice within the industry and this is something we’re keen to highlight.

At Experienced Energy, we will always make sure we find the best deal for you, and are in full support of Ofgem’s latest proposals to tackle the issues highlighted.

We often receive enquiries from customers who are looking for clarification on a number of issues and if you feel you have some unanswered questions about your own energy contracts, please get in touch and we’ll make sure we can support and provide peace of mind.

For more information about how the team at Experienced Energy can assist your business to find the best possible deal for you, please contact us on 02475 094 090 or email us at hello@experiencedenergy.co.uk