As we almost leave summer behind and approach the colder months, the energy market is once again a critical topic for businesses across Great Britain. With the recent volatility in gas and electricity prices, you might be wondering if now is the right time for your energy contract renewal.
Understanding the Current Energy Market
The energy market in 2024 has been marked by significant fluctuations. As of mid-August, gas prices have risen by 23% compared to the start of the year, currently standing at 89.25 p/th. Electricity prices, while slightly lower than they were in January, remain unpredictable, with recent figures at £74.00/MWh.
The below graph shows the volatility of the wholesale energy market and how it has moved over the last 6 months. The general trend as been upwards!
Energy contract renewal decisions are crucial at this time, especially considering the seasonal trends that typically see energy prices increase as we head into autumn and winter.
Reflecting on the Past: Lessons from the Energy Crisis
To understand the current landscape, it's essential to reflect on how energy prices have evolved over the past decade. The energy crisis of 2021 was a stark reminder of how quickly prices can spike, with many businesses forced to close due to unsustainable energy costs. But even before that crisis, energy prices have been on a general upward trajectory.
Consider this: in 2014, electricity prices averaged around 10p/kWh. Fast forward to 2024, and those prices have more than doubled, now ranging between 22p and 28p/kWh. This significant increase highlights how energy costs, as a whole, have risen sharply over the years.
Even though 2023 saw a brief period of market stability, with wholesale electricity costs ranging from £56.25/MWh to £142.00/MWh, the volatility and long-term upward trend of the past decade serve as a powerful reminder of the importance of timely energy contract renewal. Securing a contract now could help mitigate the risk of future price increases and protect your business from potential financial strain.
Why Renew Your Energy Contract Now?
Given the current market trends and historical data, there are several reasons why now might be the best time for your energy contract renewal:
Avoid Seasonal Price Increases: Energy prices typically rise as demand increases during the colder months. Locking in a contract now can help you secure a more favourable rate.
Stabilise Your Costs: With the market showing signs of volatility, renewing your energy contract now can provide cost stability, allowing you to budget more effectively.
Plan Ahead: Did you know we can fix your energy contract up to 12 months in advance? This means you can lock in today’s rates even if your current contract doesn’t expire for several months.
Monitor the Market with Our Weekly Updates
Staying informed is crucial when considering an energy contract renewal. We provide weekly market updates that can help you track the trends and decide the best time to renew your contract. You can check out our latest reports here.
Final Thoughts
The energy market is ever-changing, and making the right decision about your energy contract renewal can have a significant impact on your business’s bottom line. By renewing now, you could protect your business from potential price spikes and secure more stable energy costs for the future.
If you’re ready to explore your options, our team at Smart Energy Company is here to help. Contact us today to discuss the best strategy for your energy contract renewal.
0151 459 3388
Comments