As the UK’s current reliance on gas imports and political instability amid Brexit leaves energy consumers vulnerable to market volatility, much more foreseeable risk has meanwhile arisen in the form of non-commodity costs.
Such is the impact of non-commodity costs – the network and policy charges associated with Britain’s decarbonisation – that these additional expenses are set to make up two thirds of the business energy bill by 2020 and increase the overall cost of energy by up to 55% between 2018 and 2028.
Are you buying energy at the right price?
The obligatory charges, levies and taxes that cover the cost of running the UK’s gas and electricity networks have gone from making up just 25% of the energy bill in 2012, to accounting for the majority share of today’s business invoice.
As Britain becomes more reliant on intermittent renewable generation over the next decade – making grid balancing a more challenging (and costly) task – the impact of these charges is only set to grow. As a result, it has become essential to have a clearer picture of your future energy costs and how this affects the different energy risks your organisation faces.
Energy Risk Forecaster
SMS Plc’s free-to-use forecasting tool, the Energy Risk Forecaster, aims to assist business energy users in developing long-term investment, procurement and efficiency strategies to mitigate the risks brought on by rising costs.
Not only does the Energy Risk Forecaster set out to highlight the effect of these growing ‘third-party charges’, it also accounts for harder-to-predict wholesale energy prices using a sophisticated model that examines the underlying fundamentals of supply and demand, the economics of generation and the expected impact of legislation.
Reducing your Price Risk
We are one of the UK's leading energy services companies to manage
the risk management and procurement process for electricity, gas and water. By tracking and analysing markets in real time, we identify opportunities and threats, using our market intelligence to reduce your price risk, deliver your business the best priced power, and make you #energyconfident in face of volatile markets.
By taking the time to understand your needs and develop an energy strategy based around your specific requirements, we can not only mitigate your price risk, but also unlock benefits that the new market is creating for those willing to plan ahead and adapt quickly.
Find out more about our Risk Management and Procurement service.