The evidence points to energy prices rising in 2013
Business electricity users should consider locking into two or three-year energy contracts amid warnings of significant price rises on the way, according to the Energy Advice Line.
The UK’s leading business electricity price comparison and switching service urged firms on fixed-price energy contracts that were about to come to an end to investigate longer-term deals as protection against spiraling energy prices.
Energy regulator Ofgem recently warned consumers that £22 billion needed to be spent on essential infrastructure projects to the electricity network – the system that distributes energy around the UK.
The cost of the investment will add an average £15 to household and business electricity bills within a decade, it estimated.
Ofgem's proposed increases would be staggered - bills would initially be increased by an average of £7 in 2013, rising to £15 by 2021. Network costs currently account for about 20% of householders' energy bills.
On a separate front, energy analysts suggested this week that bills for business electricity and domestic customers will have to at least double to make the construction of new nuclear reactors in the UK financially viable.
Reports said that energy companies would need to achieve a wholesale price of £100 per megawatt hour – more than double the current price – to justify investment in the plants, which form part of the government’s draft energy bill.
Julian Morgan, managing director of the Energy Advice Line, said it was crucial that business owners make energy costs their top priority as financial pressures on the UK’s energy markets intensified.
“The evidence points to energy prices rising in 2013,” Mr Morgan said. “We cannot stress enough how important it is for customers to compare prices and see what two and three-year options are available in terms of fixed-price contracts.
“This could mean that in the very short term firms might pay more than they would under a fixed one-year contract, but in the longer term they will be better off.
“Business electricity users that don’t do this could well come out of a one-year contract to find that energy prices have risen considerably.”
The Energy Advice Line is a consumer champion and the UK’s only independent business electricity price comparison and switching services exclusively for small and medium-sized businesses.
The service enables firms to quickly and simply compare business electricity and business gas prices, and to switch to the best available deal on the market. The Energy Advice Line’s business energy experts provide advice on the complexities of energy contracts, handle the switching process and provide ongoing support as part of a free contract management service.
For further information or a free quotation, visit www.energyadviceline.org.uk or call 0800 915 1800
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