Why Cheap Commercial Electricity Rates Aren't Enough

Why Cheap Commercial Electricity Rates Aren't Enough

Why Cheap Commercial Electricity Rates Aren't Enough

Why Cheap Commercial Electricity Rates Aren't Enough

Why aren't cheap energy prices enough to remain competitive anymore?

Why aren't cheap energy prices enough to remain competitive anymore?

We are currently amongst a rapidly changing economic landscape, meaning businesses across the UK are facing the challenge of navigating through the complexity of commercial electricity rates.

As energy prices soar, influenced by global events such as the COVID-19 pandemic and geopolitical tensions, companies must understand the market's volatility and seek ways to mitigate its impact on their operations.

Unit Price Instability Continues

Business gas prices

The recent spike in wholesale gas prices, currently hovering around 135p per therm, and electricity prices at approximately £120 per MWh, reflects the instability of the market.

Although we've seen a dip due to a mild winter and reduced demand, rates are still significantly higher than in the pre-pandemic era.

A graph showing the prices of gas in the UK from January 2020 to the present day.

Business electricity prices

The recent trends in the UK's wholesale electricity market have been notable, with the unit rate reaching around £120 per MWh. This significant rise in rates highlights the market's volatility.

Despite a recent decrease influenced by a milder winter and a drop in demand, the current prices remain substantially elevated compared to pre-pandemic levels.

This scenario underscores the dynamic and often unpredictable nature of the energy market, particularly in the context of electricity pricing.

A graph showing the prices of electricity in the UK from January 2020 to the present day.

View a daily round-up of the energy market, price changes and much more on the Direct Business Solutions Daily Report.

Impact of Supplier Instability

With the government's Energy Bill Relief Scheme offering limited support, businesses are left to grapple with the unpredictability of costs without the safety net of a price cap.

The energy market has also witnessed the collapse of numerous suppliers, including the notable case of Bulb. These supplier failures are partly attributed to their business models' inability to adjust to the abrupt hikes in wholesale prices, leading to costly government bailouts.

However, there is a silver lining on the horizon.

The introduction of Contracts for Difference aims to separate renewable and nuclear energy pricing from that of gas, potentially leading to more stability. But, with predictions of high prices lingering into 2024, businesses must stay vigilant.

Business Security

Securing your energy rates

One strategy to combat the unpredictability is for many businesses to secure their energy rates, protecting themselves against future market volatility.

Reducing your consumption

Additionally, adopting energy-saving measures can significantly reduce costs. But be wary, as the complexity of energy bills, with their various taxes and levies, means that choosing the right tariff is more important than ever to avoid long-term financial strain.

Brexit brings its own set of challenges, with an anticipated further increase in gas and electricity prices. This underscores the need for businesses to secure the most favourable energy deals available.

Energy strategies

To stay ahead, businesses must arm themselves with knowledge and strategy. Understanding the factors influencing commercial electricity rates, from global events to government interventions, is the first step. Implementing measures to lock in favourable rates and reduce energy consumption is the second.


At this juncture, it's worth highlighting the role of Industrion, a key player in the realm of energy visualisation and management. Industrion offers an innovative approach to energy visualisation and understanding.

Their expertise in navigating the complex energy market, combined with advanced analytical tools and access to live prices from the market, provides businesses with a strategic edge.

By leveraging Industrion's services, companies can gain insights into their energy consumption patterns, unlock cost-saving opportunities, and access tailored energy procurement strategies that align with their specific needs and goals.

This approach ensures not only short-term cost savings but also long-term sustainability and efficiency.

Generate Your Business Electricity

In the evolving landscape of energy management, businesses are increasingly recognising the value of transitioning from merely seeking cost-efficient commercial electricity rates to embracing the generation of their business electricity supply.

This shift represents more than just an economic decision; it's a strategic move towards sustainability and autonomy. The contemporary business environment demands a proactive approach to energy consumption, where the focus extends beyond just cost savings to a broader vision of environmental stewardship and self-sufficiency.

By investing in renewable energy systems such as solar panels and wind turbines, businesses can harness the power of nature to fuel their operations, ensuring a steady, sustainable supply of energy.

This not only aligns with global environmental goals but also positions the business as a forward-thinking, responsible entity in the eyes of customers and stakeholders.

The benefits of generating your business electricity are multifaceted, offering both tangible returns and contributing to a healthier planet. Embrace this opportunity to redefine your business’s energy strategy, setting a new standard for operational excellence and ecological responsibility.

A business's building and car park with solar panels on the roof.

What about other innovative energy technologies?

Combined Heat and Power (CHP)

The concept of Combined Heat and Power (CHP), also known as co-generation, represents a pinnacle of energy efficiency in the modern industrial landscape. CHP systems are ingeniously designed to produce electricity while simultaneously capturing and repurposing the heat generated during this process.

This dual functionality not only maximises energy efficiency but also translates into substantial cost savings for businesses with significant heat and power requirements.

By integrating CHP systems, companies can significantly reduce their energy expenditures, benefiting from a more sustainable, efficient, and economically viable energy solution.

This approach aligns perfectly with the growing emphasis on sustainable industry practices, offering a practical solution that meets high energy demands while contributing positively to environmental conservation efforts.

Energy Storage Solutions

Incorporating energy storage solutions, such as advanced battery systems, is a transformative strategy for businesses harnessing renewable energy sources.

These sophisticated storage mechanisms serve as critical components in managing energy flows, enabling businesses to securely store surplus energy generated from renewables like solar or wind power.

This approach not only guarantees a consistent and reliable energy supply during periods of fluctuating production but also opens up the potential for businesses to actively participate in the energy market by selling excess energy back to the grid.

This not only enhances energy efficiency and sustainability but also presents an opportunity for an additional revenue stream.

By integrating energy storage solutions, businesses are not just adopting an eco-friendly stance; they are positioning themselves at the forefront of a smart, responsive, and sustainable energy management paradigm.

Smart Grid Technology

Implementing smart grid technology marks a significant leap forward in how businesses manage and optimise their energy usage.

Smart grids represent an advanced energy network that intelligently integrates the behaviours and actions of all connected users – both suppliers and consumers. This innovative technology facilitates efficient management of energy flow, leading to substantial cost reductions and enhanced operational sustainability.

By employing smart grids, businesses can gain real-time insights into their energy consumption, allowing for more precise control over energy use. This not only streamlines operations but also significantly minimises wastage.

Moreover, smart grids are instrumental in integrating renewable energy sources, further reinforcing a company's commitment to sustainability. In essence, embracing smart grid technology is a strategic move for businesses aiming to thrive in an era of heightened environmental consciousness and energy efficiency.

Energy from Waste (EfW)

The concept of Energy from Waste (EfW) is transforming how businesses view and handle their waste output, turning a potential liability into a valuable asset.

For businesses that generate substantial amounts of waste, technologies such as anaerobic digestion and incineration offer innovative solutions to convert this waste into usable energy.

Anaerobic digestion utilises microorganisms to break down organic waste in the absence of oxygen, producing biogas that can be used for heating, electricity, or as a fuel alternative. Incineration, on the other hand, burns waste at high temperatures, generating heat that can be harnessed to produce steam for power generation.

These processes not only provide a sustainable source of energy but also significantly reduce the volume of waste sent to landfills, thereby minimising environmental impact.

Adopting Energy from Waste strategies aligns with global sustainability goals and demonstrates a commitment to innovative and responsible waste management. For businesses, this is not just about energy generation; it's about embracing a circular economy approach that values resource efficiency and environmental stewardship.

Finding Energy Services

Navigating the complex landscape of energy services can be a daunting task for businesses. Often, the journey is riddled with technological intricacies and concerns about the financial viability of these services.

A common pitfall, as highlighted by the team at Industrion, involves encountering improperly installed energy systems, like solar panels, which may result in an unfeasibly long payback period, sometimes extending beyond 25 years.

This highlights a critical gap in the market: the need for reliable, expert guidance in selecting and implementing energy solutions.

Recognising this challenge, Industrion emerges as a pivotal player, dedicated to simplifying the process of accessing and understanding energy services for the B2B market.

Their mission is to create a comprehensive, one-stop hub for all energy-related needs. In an era where information about sustainable energy solutions is widespread across media but hard to navigate, Industrion steps in to demystify and streamline the process.

Their approach is not just about providing services; it's about offering clarity and confidence to businesses stepping into the realm of energy management and sustainability.

By doing the groundwork to bring these services to the forefront, Industrion is not only addressing a market need but also contributing to a broader shift towards more accessible, sustainable energy practices in the business world.

Their commitment to making energy services straightforward and attainable resonates with the growing demand for transparency and efficiency in this sector.

Engineers infront of a computer looking at energy data.

Who is the cheapest commercial electricity supplier?

In the intricate realm of energy supply, understanding the variability and nuances behind different offerings is crucial. Just like retail stores showcasing a variety of products, energy suppliers present packages that encompass both the energy supply and associated costs. This competitive market constantly evolves, with suppliers introducing new products aimed at expanding their market share.

The significance of this dynamic landscape extends beyond simply viewing an array of prices. It demands a deeper comprehension of the services and benefits that accompany each energy product.

For instance, consider a supplier whose rates are marginally higher, yet they provide a comprehensive monitoring package. This service enables businesses to actively manage and optimise their energy consumption, potentially leading to significant savings.

In such scenarios, the concept of 'cheapest supplier' becomes multifaceted, as the true value lies in balancing cost with the potential for energy efficiency and savings.

Flexible Business Electricity Rates

Flexible and Multi-Purchase Energy Products

Flex and multi-purchase energy products represent a sophisticated approach to energy procurement, particularly suited to larger-scale consumers. These products are closely tied to the fluctuations of commodity prices, such as electricity or gas, on the stock exchange.

The allure of such products lies in the potential for substantial cost savings through astute energy trading strategies. However, it's important to understand the full scope of these offerings, including the non-commodity costs associated with delivering energy to end users.

Delivering energy is a complex and expensive endeavour, encompassing various elements like transmission, distribution, and other system charges.

Transmission and Distribution Charges

While the idea of having an energy trader manage your energy procurement on the stock exchange might seem attractive, it's crucial to consider these non-commodity costs and any additional fees included in the solution.

These costs can significantly impact the overall value proposition, especially for businesses that don't consume energy on a large scale.

However, for those who are major energy users, flex and multi-purchase products should not be overlooked. A well-conceived trading strategy, executed by an experienced trading team, can lead to considerable savings in energy costs.

These products offer a dynamic way to manage energy procurement, allowing businesses to benefit from market lows while managing risks associated with market highs.

The Benefits for Large-Scale Energy Consumers

It's worth noting that such strategies are more susceptible to market volatility, as evidenced during recent energy crises.

This increased exposure to price fluctuations necessitates a comprehensive understanding of the energy market and its risks. For businesses considering flex and multi-purchase products, partnering with a knowledgeable and experienced energy service provider like Industrion can be invaluable.

Such a partnership can provide the expertise and insights necessary to navigate the complexities of these products, ensuring that businesses maximise their benefits while effectively managing the associated risks.

Let's summarise...

Indeed, the intricacies of business energy contracts add another layer of complexity to energy management for companies. Typically, these contracts span extended periods, often locking businesses into fixed terms of around five years.

This duration highlights the significance of making well-informed decisions at the outset, as the opportunity for frequent switching or renegotiation is limited.

This reality underscores the indispensable role of a comprehensive service platform that not only facilitates informed decision-making at the contract stage but also supports ongoing energy management.

A platform that provides access to advanced technology and visualisation tools is crucial for businesses to monitor and manage their energy consumption effectively.

With such tools, businesses can gain deeper insights into their energy usage patterns, identifying areas where efficiency can be improved. This might involve analysing peak usage times, understanding the impact of different operational activities on energy consumption, or identifying outdated equipment that consumes excessive energy.

By leveraging this data, companies can implement targeted strategies to reduce their overall energy consumption, leading to cost savings and enhanced sustainability.

Furthermore, in an era where environmental consciousness is increasingly important, having the ability to closely monitor and manage energy usage aligns with broader corporate social responsibility goals.

This proactive approach to energy management not only aids in cost reduction but also positions businesses as responsible and sustainable entities in their respective industries.