Market updates
Notes from the business energy market
Periodic, plain-English updates on what's moving in commercial energy pricing and what it means if you have a contract coming up for renewal.
Renewal windows are opening earlier for larger sites
Several suppliers are now prepared to quote renewal rates further out than 12 months for half-hourly metered sites, provided the account is in good standing. For businesses managing several sites, this makes it more realistic to align end dates across a portfolio without accepting a short-term bridge contract at a weaker rate. If your largest site's renewal date is more than a year away, it is still worth asking what an early indicative quote would look like — you are not obliged to take it, but it gives you a benchmark.
Non-commodity charges continue to make up a growing share of the bill
Network charges, the Renewables Obligation, Contracts for Difference and other levies are set outside of wholesale energy trading, but they are collected through the same unit rate businesses see on their invoice. Over recent price reviews these charges have moved independently of wholesale costs, which is one reason a renewal quote can rise even in a period when wholesale prices are described as 'falling' in the general press. When you're reviewing a quote, it is worth asking your specialist to break out commodity from non-commodity cost so you understand what is actually driving the number.
Deemed rate exposure remains the most avoidable cost we see
The single most common issue we still see when a business first comes to ECR is supply sitting on deemed or out-of-contract rates, usually because a renewal letter went unanswered or a fixed term lapsed without a decision being made. Deemed rates are set by the supplier and carry no negotiation, and they are consistently the most expensive way to buy commercial energy. If you are unsure whether a site is in-contract, checking your most recent bill for the rate type is the fastest way to find out.
Standing charges are becoming a larger part of small-site bills
For lower-consumption sites — small retail units, takeaways, single offices — the fixed standing charge now represents a meaningful share of the total annual bill, independent of how much energy is actually used. This changes how some smaller businesses should think about contract length and supplier choice, since a slightly higher unit rate with a lower standing charge can sometimes work out cheaper over a year than the reverse, depending on your consumption pattern.
Multi-site businesses are consolidating billing dates
We're seeing more multi-site operators — particularly in hospitality and property management — ask suppliers to align billing cycles across sites even where contract end dates differ. It doesn't change the underlying rates, but it does make monthly reconciliation considerably simpler for finance teams managing several invoices a month. Ask your supplier or broker whether this is available before assuming it isn't.
Early engagement with renewal letters pays off
Suppliers typically send renewal correspondence 3 to 6 months ahead of a contract's end date. Businesses that respond early — even just to say they want to review the market — tend to end up with more competitive options than those who wait until the final few weeks, when the supplier has less incentive to offer their sharpest terms and less time is left to compare alternatives properly.
Not sure how this affects your renewal?
Speak to a specialist about your specific contract and site. Call 020 3631 5541.