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The Business Benefits of Smart Energy Procurement

Picture of William Oliver
William Oliver

Head of Business Development

Overview

  • Adopting intelligent energy procurement strategies enables UK businesses to achieve significant cost savings, enhance sustainability efforts, and improve operational efficiency.
  • By securing competitive rates and using fixed or flexible supply contracts, businesses can manage price risks and ensure budget stability.
  • Procuring renewable energy helps reduce carbon footprints, improves brand reputation, and meets 2030 Net Zero targets.
  • Intelligent procurement services provide expertise in navigating complex energy markets, leveraging technology for real-time energy management, and supporting sustainability goals.
UK business Weighing the benefits of smart energy procurement

In the ever-evolving energy landscape, adopting an intelligent approach for energy procurement is becoming a crucial asset for UK businesses. 

By strategically managing energy purchases, you can achieve significant cost savings, enhance sustainability and net zero initiatives, and improve operational efficiency for your business. 

So, what tangible benefits could you realise by incorporating an intelligent utility procurement strategy? 

Cost Savings and Budget Stability through Efficient Procurement

One of the most immediate and tangible benefits of smart energy procurement is cost control: protecting budgets, achieving savings and managing price risk.  

By leveraging energy procurement services, your business can secure competitive rates and avoid potential pitfalls of market volatility. 

Fixed price contracts, for example, provide budget certainty by removing all market exposure.


Market price movements, up or down, will have no impact on costs for the fixed contract term, which promotes accurate financial planning and efficient allocation of resources.


Flexible supply contracts allows you to execute a reactive trading strategy to manage market exposure and achieve the right balance of exposure to opportunity (and mitigation of risk). 

Enhanced Sustainability with Renewable Energy Procurement

An executive discussing budget stability pointing at a whiteboard

As we approach the 2030 Net Zero deadline, ‘renewable energy’ is no longer just a buzzword; it is a business imperative. 


Renewable energy procurement is a critical component of a company’s carbon management plan and overall sustainability strategy. 

By sourcing energy from renewable sources like wind, solar, and hydro, your business can significantly reduce its carbon footprint and enhance your brand’s reputation as a business that cares about its environmental impact. 

There are several options to procure green energy supplies, including Renewable Energy Guarantees of Origin (REGO) and Power Purchase Agreements (PPA) depending on your budget and your energy requirements.

In a competitive business environment, every advantage counts. 

Companies that adopt sustainable solutions and demonstrate a commitment to renewable energy procurement can differentiate themselves from their competitors. 

This can be particularly appealing to environmentally-conscious consumers and investors looking for companies with strong ESG (Environmental, Social, and Governance) credentials.

Risk Management in Business Energy Procurement

The energy market is inherently volatile and is often reliant on intermittent renewables and global supplies, or influenced by weather, geopolitical events, natural disasters and economic shifts, both at a local and global level.

There is an unseen benefit, however: adopting an agile, flexible procurement strategy will enable your business to capitalise on market lows, and consistently ‘locking in’ lower rates can generate significant cost savings.


Naturally, there is an inherent risk, so a robust risk management strategy is essential.


A flexible procurement approach requires a dedicated team, and the ability to assess market analytics and predict outcomes, which is why businesses often rely on service partners to achieve their desired goals.

The Importance of Intelligent Procurement in Today’s Energy Landscape

As the UK transitions towards a more sustainable energy future, the importance of intelligent procurement cannot be overstated.

Carbon reporting and renewable energy sources are the new cornerstones for ethically minded UK businesses (and the Public Sector).

As we fast approach the 2030 Net Zero deadline, it is apparent that businesses have to invest more in sustainability programmes.

By adopting an intelligent procurement strategy, we can produce immediate cost savings that you can use to support sustainability initiatives.

Navigating Complex Markets with Energy Procurement Services

The energy market is complex and constantly changing. Intelligent procurement services provide businesses with the expertise and tools needed to navigate this complexity. From understanding regulatory changes to predicting market trends, these services equip businesses with the knowledge they need to make informed decisions.

Leveraging Technology for Energy Management for Businesses

Technology plays a crucial role in modern energy procurement. Advanced software and analytics can monitor energy usage in real-time, predict future consumption patterns, and identify cost-saving opportunities. By integrating these technologies, businesses can stay ahead of the curve and make proactive decisions.

Supporting Renewable Energy Goals Through Sustainable Solutions

As the UK government sets ambitious targets for reducing greenhouse gas emissions, businesses are under increasing pressure to align with these goals. Renewable energy procurement is a key strategy in this alignment. Intelligent procurement services help businesses identify and secure renewable energy sources, ensuring compliance with regulations and contributing to national sustainability targets.

Image of Windmills Symbolic of Sustainable Energy Procurement

How EIC Partnership Can Benefit Your Business

At EIC Partnership, we are committed to helping you find the energy contract that best meets your business requirements and your long-term goals.

Regardless of the contract type you opt for, you can be confident that your account will be expertly managed to its fullest potential, and that we will explore every opportunity to help you achieve cost savings.

Our seasoned Procurement Team will provide exceptional support, and with our timely market intelligence reports, you will have the detailed insights needed to make informed decisions that drive your business’s success.

Learn more about our Energy Procurement services or get in touch with us today to find out how much we can save, together.

 

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FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

]]> https://eic.co.uk/the-business-benefits-of-smart-energy-procurement/feed/ 0 UK Political Party Stances on Climate and Energy Policies https://eic.co.uk/uk-election-stances-on-energy-policies/ https://eic.co.uk/uk-election-stances-on-energy-policies/#respond Tue, 25 Jun 2024 11:03:28 +0000 https://eic.co.uk/?p=11680
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UK Political Party Stances on Climate and Energy Policies

Picture of Ashley Game
Ashley Game

Insight Analyst

As the UK gears up for the general election, major political parties release manifestos that reveal position on key energy issues.

Overview

  • Labour Party: Achieve net-zero by 2050, invest in renewables and insulation, phase out new oil and gas licenses.
  • Conservative Party: Net-zero by 2050, invest in offshore wind and nuclear, annual North Sea oil and gas licensing.
  • Liberal Democrats: Net-zero by 2045, heavy investment in renewables, emergency Home Energy Upgrade programme.
  • Green Party: Zero-carbon before 2050, substantial wind and solar investments, phase out nuclear and fossil fuels.

The main UK political parties have released their manifestos in an attempt to attract voters ahead of the general election on Thursday 4th July.

Climate change, energy and the net-zero transition are expected to play a central role in the election, with the environment and climate change the fifth most important issue to voters, according to a recent poll from YouGov.

In this blog we have summarised each party’s stance on some of the major energy issues including net-zero, renewable generation, nuclear, North Sea oil and gas, energy bills and household insulation.

Flags Hanging from the Side of a Building as UK General Election Approaches

Labour Party

The Labour party want to make Britain a clean energy superpower, to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030, accelerating to net-zero by 2050.

They will invest £8.3bn in a new publicly-owned company, Great British Energy, which will be funded by a windfall tax on oil and gas giants.

They aim to double onshore wind, triple solar power, and quadruple offshore wind by 2030. They will also support new nuclear and invest an additional £6.6bn to install insulation in 5 million homes.

Labour want to ensure a phased and responsible transition in the North Sea with a promise not to award any new oil and gas licences as they say it would not take a penny off bills, cannot make us energy secure, and will only accelerate the worsening climate crisis.

However, Labour will not revoke existing licenses, such as the recently awarded license at Rosebank, and will partner with business and workers to manage existing fields for the entirety of their lifespan.

They will also ban fracking for good and have committed to not grant any new coal licences and will stop the proposed new coal mine in Cumbria.

Conservative Party

The Conservative party aim to cut the cost of tackling climate change for households and business by reducing green levies on bills, and deliver net-zero by 2050.

They will treble offshore wind capacity and support onshore wind and solar in the right places, but not on the best agricultural land or where there is public opposition.

They will also scale up nuclear power and approve two new fleets of small modular reactors within the first 100 days of the next Parliament.

The Conservatives will also legislate to ensure annual licensing rounds for North Sea oil and gas production to provide energy to homes and businesses across the country and protect high-skilled and well-paid jobs in the industry.

They will keep the windfall tax on oil and gas in place until 2028-29, unless prices fall back to normal sooner, which is expected to raise over £26bn.

They will also introduce a new energy efficiency voucher scheme open to every household in England.

This would provide grant funding towards insulation, other energy efficiency improvements and solar panels.

Liberal Democrats

The Liberal Democrats are committed to cutting greenhouse gas emissions to net-zero by 2045 at the latest, which is five years earlier than the other major parties.

They will invest in renewable power so that 90% of the UK’s electricity is generated from renewables by 2030 and will remove the current restrictions on new solar and wind power, as well as investing in tidal and wave power.

They will also launch an emergency Home Energy Upgrade programme, with free insulation and heat pumps for low-income households.


The Lib Dems want to help people with the cost of living and their energy bills by implementing a proper, one-off windfall tax on the super-profits of oil and gas producers and traders.

They will also introduce a social tariff to provide targeted energy discounts for vulnerable households. They intend to implement the UK’s G7 pledge to end fossil fuel subsidies, while ensuring a just transition that values the skills and experience of people working in the oil and gas industry.

They would maintain the ban on fracking and introducing a ban on new coal mines as well as reinstating the 2030 ban on new petrol and diesel cars.

Green Party

The Green party aim to push the Government to transition to a zero-carbon society as soon as possible, and more than a decade ahead of 2050.

They will install 80GW of offshore wind, 53 GW of onshore wind, and 100 GW of solar by 2035.

They want to see the phase-out of nuclear energy, which they say is unsafe, more expensive than renewables and takes too long to develop.

They will also invest £9bn over the next five years for low-carbon heating systems.


The Greens would cancel recent fossil fuel licences, such as for Rosebank, and stop all new fossil fuel extraction projects in the UK.

They want to remove all oil and gas subsidies and introduce a carbon tax to drive fossil fuels out of the economy and raise money to invest in the green transition.

They would also introduce a carbon tax on all fossil fuel imports and domestic extraction, based on greenhouse gas emissions produced when fuel is burned.

Reform UK

At the other end of the scale is Reform UK who would scrap net-zero and related subsidies as they believe it is crippling our economy, pushing up bills, damaging British industries, and making us less secure.

They claim that scrapping net zero and related subsidies would save £30bn per year.

However, the government independent spending watchdog, the Office for Budget Responsibility, has said that “the costs of failing to get climate change under control would be much larger than those of bringing emissions down to net zero”.

Reform say they will unlock Britain’s vast energy treasure of oil and gas to slash energy bills, beat the cost-of-living crisis and unleash real economic growth.

They would start fast-track licences of North Sea oil and gas as well as fast-tracking clean nuclear energy with new Small Modular Reactors, built in Britain.

They also want to grant shale gas licences on test sites for two years and enable major production when safety is proven, with local compensation schemes.

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FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

]]> https://eic.co.uk/uk-election-stances-on-energy-policies/feed/ 0 My Fixed Energy Tariff is Ending: Steps to Take Now https://eic.co.uk/fixed-energy-tariff-ending/ https://eic.co.uk/fixed-energy-tariff-ending/#respond Tue, 11 Jun 2024 10:45:40 +0000 https://eic.co.uk/?p=11460
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My Fixed Energy Tariff is Ending: Steps to Take Now

Picture of Rachael Thatcher
Rachael Thatcher

Head of Fixed Pricing

Is your fixed energy tariff ending? Learn essential steps to manage energy costs, avoid expenses, and secure the best new tariff for your business efficiently.

Overview

  • Understand the importance and benefits of fixed energy tariffs for budgeting and financial planning.
  • Review and compare new tariff options before your current contract ends to avoid unnecessary expenses.
  • Assess your energy consumption to choose a suitable new tariff and negotiate with your current supplier for better rates.
  • Plan a smooth transition and stay informed about market trends to manage your energy costs effectively.

Energy costs are a significant part of any business’s overhead, and managing these expenses effectively is crucial. 

If you find yourself in the position where your fixed energy tariff is ending, you might be wondering what steps to take next. 

This blog post will guide you through the essential actions to ensure your business continues to manage energy costs efficiently and avoids any unnecessary expenses.

What to Do when Fixed Energy Tariff is Ending

Understanding Fixed Energy Tariffs

What is a fixed energy tariff?

Simply put, a fixed energy tariff is an agreement between your business and your energy supplier that locks in the price you pay for energy for a specified period, usually ranging from one to three years. 

This means that no matter how much the market prices fluctuate, your energy rates remain constant.

Why Fixed Energy Tariffs Matter

Fixed tariffs offer predictability, which is invaluable for budgeting and financial planning. 

They protect your business from sudden spikes in energy prices, providing a stable cost structure that makes it easier to manage your finances.

"Start comparing new tariff options at least a few months before your current contract ends. Look at several fixed tariff options to understand which offers the best value for your business. Consider consulting with energy brokers who can provide insights into the best deals available."

My Fixed Energy Tariff is Ending: What Should I Do?

If you are on a fixed energy tariff and your contract is about to end, what you do next can significantly impact your energy costs. 

Here’s a step-by-step guide to help you navigate this transition smoothly:

  1. Review Your Current Contract
    Before your fixed energy contract ends, review the terms and conditions. Understand the exact end date and any notice periods required for switching suppliers. This will help you avoid any penalties or fees for early termination or late renewals.
  2. Compare New Tariff Options
    Start comparing new tariff options at least a few months before your current contract ends. Look at several fixed tariff options to understand which offers the best value for your business. Consider consulting with energy brokers who can provide insights into the best deals available.
  3. Assess Your Energy Consumption
    Analyse your energy consumption patterns. If your business has grown or your operations have changed, your energy needs may have increased or decreased. This assessment will help you choose a tariff that matches your current usage.This may also prevent additional charges from being applied if your new contract includes a volume tolerance threshold. 
  4. Negotiate with Your Current Supplier
    Don’t hesitate to negotiate with your current supplier. They may offer you a better deal to retain your business. Use the quotes from other suppliers as leverage to get a competitive rate.
  5. Consider Long-Term Needs
    Think about your business’s long-term needs. If you expect energy prices to rise, a longer fixed-term contract might be advantageous. However, if you anticipate changes in your energy usage or industry prices, a shorter-term or a variable tariff might be more suitable.
  6. Plan for a Smooth Transition
    Ensure a smooth transition by confirming the end date of your current contract and the start date of the new one. This will prevent the possibility of being moved to a more expensive standard variable rate automatically.
  7. Stay Informed About Market Trends
    Keep an eye on energy market trends and government policies that might affect energy prices. Staying informed will help you make better decisions regarding your energy contracts.
 

When your fixed energy tariff is ending, taking proactive steps is essential to maintain control over your energy costs. 

By reviewing your current contract, comparing new options, assessing your consumption, negotiating with suppliers and planning for the future, you can ensure that your business remains energy-efficient and cost-effective. 

Remember, the goal is to find a tariff that provides the best balance of cost stability and flexibility for your business’s unique needs.

By following these steps, you can navigate the end of your fixed energy tariff with confidence and continue to manage your energy expenses effectively.

A person signing a new fixed energy contract

How EIC Partnership Can Help

Navigating energy tariffs can be complex, and EIC Partnership is here to simplify the process for UK businesses. 

As a leading energy and utility consultancy, EIC Partnership offers expert advice and comprehensive services to ensure your business secures the best energy deals.

We can help you find the most competitive tariffs, by leveraging our extensive supplier network. Afterwards, we handle contract renewals and negotiations, ensuring you always have favourable terms.

We will also carry out extensive energy consumption analysis—detailed insights into your energy usage to help you make informed decisions and identify savings opportunities.

Moreover, our expert team monitors the market continuously and keeps you updated ahead of industry changes.

EIC Partnership tailors its services to your business’s unique needs, whether you’re a small business or a large enterprise. Our expertise allows you to focus on your core operations while we manage your energy needs efficiently.

Partner with EIC Partnership to ensure a smooth transition when your fixed energy tariff ends and secure the best energy options for your business.

Share to :

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You might also be interested in these posts

FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

]]> https://eic.co.uk/fixed-energy-tariff-ending/feed/ 0 The Eii Exemption Scheme: Everything You Need To Know https://eic.co.uk/the-eii-exemption-scheme-everything-you-need-to-know-2/ https://eic.co.uk/the-eii-exemption-scheme-everything-you-need-to-know-2/#respond Mon, 08 Jan 2024 14:41:00 +0000 https://eic.co.uk/?p=11956
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THE EII EXEMPTION SCHEME: EVERYTHING YOU NEED TO KNOW

Overview

  • The EII Exemption Scheme offers up to 85% cost relief on CfD, RO, and FiT levies for large energy consumers, aiding competitiveness.
  • Launched to support net-zero goals, it offsets renewable energy costs that typically increase energy bills for heavy industry.
  • The scheme, replacing an earlier 2016 compensation initiative, began in 2017-2018, providing stable, long-term savings.
  • Eligibility requires a UK-manufactured product in a qualifying sector, high electricity usage, financial stability, and thorough usage data.

The EII exemption scheme aims to help big energy users stay competitive in a global market.

Qualifying businesses can claim an exemption of up to 85% of their Contract for Differences (CfD), Renewables Obligation (RO), and Feed-in Tariff (FiT) costs. Providing firm financial footing in a post-Covid economy.

Eligible Businesses Like Metal Production Can Be Exempt from Certain Energy Levies

WHY WAS THE EII EXEMPTION SCHEME LAUNCHED?

The UK has pledged to achieve net zero emissions by 2050, which will require a transformative shift towards clean energy across the economy. This has resulted in a variety of government schemes which encourage the rise of electricity generated from renewable and low carbon sources.

This initiative has seen success, with renewables accounting for 47% of the UK’s generation in the first quarter of 2020. And even as consumption dropped in Q2, wind power generated electricity continued to rise due to increased capacity. This upwards trajectory is only expected to accelerate, with promising new renewable energy projects on the horizon.

The levies and obligations funding this growth are initially covered by energy suppliers. But, these costs are passed down to domestic and non-domestic consumers in the form of higher energy bills.

This puts energy-intensive businesses at a disadvantage. Especially when competing against their EU counterparts with lower energy costs. The launch of the EII exemption scheme is a solution to this problem and aims to maintain the UK’s position in the global market.

WHEN WAS THE SCHEME ROLLED OUT?

The original solution to the issue of higher costs for EIIs was a compensation scheme launched in 2016. This allowed big energy users to apply for relief from the energy costs they had already paid.

This was then replaced by the EII exemption scheme, rolled out between autumn 2017 and spring 2018. This change of approach is meant to offer energy-intensive businesses more long time certainty and stability as well as higher cost savings.

EII Exemption Applies to a Variety of UK Businesses

WHO CAN APPLY?

To be eligible for an EII exemption, a business must meet five key requirements.

  • The business must manufacture a product in the UK within an eligible sector – the “sector level test”.
  • The business must pass a 20% electricity intensity test – the “business level test”.
  • The business must not be an Undertaking in Difficulty (UID) – the UID guidelines explain that “an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term.”
  • The business must have at least two quarters of financial data.
  • The application must contain evidence of the proportion of electricity used to manufacture the product for a period of at least three months.

Learn more about applying for an exemption certificate.

Big energy users who do not qualify for the EII exemption scheme should still be aware of rising energy costs. They should explore schemes such as Carbon Footprinting, Energy Audits, Streamlined Energy and Carbon Reporting (SECR) and Energy Savings Opportunity Scheme (ESOS). These can provide invaluable insight into your environmental impact and routes to improve energy efficiency within your company.

HAS COVID-19 HAD AN IMPACT ON THE SCHEME?

Covid-19 has thrown various sectors of the UK economy into a state of uncertainty and decline. The energy sector was especially impacted by the fall in energy consumption in the first six months of 2020. And resulted in a subsequent drop in electricity prices. This could make it more difficult to calculate a business’ energy intensity and whether it is “in difficulty”. Because of this, the government will be excluding the period from 31 December 2019 to 30 June 2020 from its assessment of whether a business is in financial difficulty or not.

HOW CAN EIC PARTNERSHIP HELP?

Here at EIC Partnership, we support big energy users with the management of their energy, buildings, carbon and compliance. As a result, we’re able to uncover actionable insights that allow you to manage and control all elements of your energy bill on both sides of the meter.

Armed with a comprehensive understanding of government schemes and legislation, we can help turn your frustrating admin into rewarding opportunities. We can navigate complex applications such as that for the EII exemption certificate – saving you valuable time and resources.

Contact us to learn more about how EIC Partnership can help your business.

Share to :

More News

You might also be interested in these posts

FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

]]> https://eic.co.uk/the-eii-exemption-scheme-everything-you-need-to-know-2/feed/ 0 Controlling Your Energy Bills: A Guide To Non-commodity Costs https://eic.co.uk/controlling-your-energy-bills-a-guide-to-non-commodity-costs-2/ https://eic.co.uk/controlling-your-energy-bills-a-guide-to-non-commodity-costs-2/#respond Sat, 06 Jan 2024 18:45:00 +0000 https://eic.co.uk/?p=11948
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CONTROLLING YOUR ENERGY BILLS: A GUIDE TO NON-COMMODITY COSTS

Overview

  • Non-commodity costs include transmission, distribution, and government levies, making up a growing portion of energy bills—around 70% in 2022, expected to rise to 80% in the coming years.
  • Suppliers face variable costs to maintain the power network, influenced by the type of energy generation, especially as renewables grow, increasing system balancing costs.
  • Monitoring bills and planning energy use, especially around Triad periods, can help businesses control costs amid rising non-commodity expenses.
  • EIC Partnership offers tailored services, including fixed or flexible contracts and daily energy-use warnings, helping businesses manage bills effectively.

The cost of electricity has fluctuated considerably in the last few years, for many reasons. During the multiple national lockdowns, prices started to rise considerably and have since reached all-time highs. And due to unforeseen events around the world following Covid-19, the markets have remained incredibly volatile. One of the reasons for this is a rise in non-commodity, or ‘third-party’, costs.

The term ‘non-commodity’ costs has worked itself into many conversations throughout the past few years, within the energy industry. But understanding what non-commodity costs are, and how they could impact you and your business can be difficult to understand.

So, we have broken it down for you. Here is our guide to the different types of non-commodity costs.

WHAT ARE NON-COMMODITY COSTS?

Essentially, the amount we pay for energy includes three different expenses. The first, is the wholesale price of the actual amount of power we use (the commodity). Secondly, we have the cost of transmission and distribution across the network. And finally, a variety of government levy and taxes. The energy companies pay these fees, and pass the cost onto their customers.

In 2011, non-commodity costs accounted for around 36% of energy prices. In 2022 this has already risen to around 70% and is predicted to reach 80% over the next decade and continue to ascend.

TRANSMISSION AND DISTRIBUTION COSTS

Each supplier incurs expenses to run and maintain the power network. These vary from provider to provider, and largely depend on the type of power plant. For example, solar and wind generators are less consistent in output, as compared with gas or nuclear power. With a move towards renewable energy, the cost of balancing the system is likely to increase.

GOVERNMENT LEVY AND TAXES

These taxes fund various government initiatives and green energy programs.

CONTROLLING YOUR EXPENSES

With the increases in non-commodity costs set to continue, it is important to keep an eye on your bills. Proper monitoring, and tracking monthly changes, will ensure you aren’t overpaying.

With such turbulence in the market, there is less control over the wholesale cost of electricity. What can be controlled, however, is how we use energy. At EIC Partnership, we can help you plan your usage around annual Triad periods. This can make a significant difference to your energy bills. Our daily traffic light warnings will help you avoid any unnecessary fluctuations, and keep costs low.

Whether you prefer the stability of a fixed price, or the control of a flexible contract, we can help. Setting up an energy contract can be a long process, especially if you want a good price. We have the experience to negotiate with your provider, to make sure you are not paying more than you should be.

Our service is tailored to your needs. To find out what we can do for your business, get in touch today.

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FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

]]> https://eic.co.uk/controlling-your-energy-bills-a-guide-to-non-commodity-costs-2/feed/ 0 Targeted Charging Review (TCR) Guide https://eic.co.uk/targeted-charging-review-tcr-guide-2/ https://eic.co.uk/targeted-charging-review-tcr-guide-2/#respond Fri, 05 Jan 2024 15:37:00 +0000 https://eic.co.uk/?p=11938
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TARGETED CHARGING REVIEW (TCR) GUIDE

Overview

  • Ofgem’s TCR adjustments from April 2023 will introduce fixed charging bands for TNUoS, affecting non-domestic consumers based on energy consumption or capacity.
  • Larger consumers with half-hourly (HH) meters may see benefits, especially in London, while domestic and non-half-hourly (NHH) consumers may face slight cost increases.
  • As TDR charges shift to fixed costs, businesses that previously reduced consumption during Triad periods to lower bills will lose this cost-saving option.
  • EIC’s Long Term Forecast Report offers tailored cost breakdowns over 5 to 20 years, helping businesses anticipate expenses and manage budgets effectively.

The Targeted Charging Review (TCR) changes will continue coming into effect, with transmission charges in April 2023.

We look at how these changes will impact consumers and how we can help businesses to prepare.

CHANGES TO TNUOS

Transmission Network Use of System (TNUoS) charges cover the costs of maintaining the electricity networks that supply your energy. Ofgem is implementing changes to these charges to ensure that costs are distributed fairly across all consumers.

Subject to Ofgem consultation, from April 2023 a proportion of your TNUoS charges will be based on a series of fixed charging bands.

The band you are placed into will depend on your average annual consumption for non-half hourly (NHH) sites or average capacity for half-hourly (HH) sites, calculated over the two year period from October 2018 to September 2020.

TNUoS charges for non-domestic consumers will be based on a series of fixed charging bands set for the whole country.


Ofgem will review and may revise these charging bands and their boundaries so that they can be implemented alongside new electricity price controls, with the next (RIIO-3) starting in April 2026.

CHANGES TO TRIADS

The largest component of Triad charges is called the Transmission Demand Residual (TDR), and this is the charge that will change from April 2023, becoming a fixed charge rather than being determined through Triads. Triad charges will continue to apply to the forward-looking components of TNUoS charges, which are known as the Transmission Demand Locational charges, although these represent less than 10% of the total TNUoS charge.

Triad periods are the three highest winter peak periods. They are retrospectively calculated in March each year and form the basis of the transmission network component (TNUoS) of large companies’ energy bills. By reducing consumption or switching to onsite generation during forecast Triad periods, some firms can save large amounts of money on their bills.


The removal of the TDR leaves one Triad season left currently occurring this winter, continuing until the end of February 2023. Beyond that, the incentive for Triad avoidance will be greatly reduced. And companies that are taking action to reduce costs during Triad periods could see an increase in their electricity bills.

WHAT IMPACT WILL THIS HAVE ON CONSUMERS?

The TCR changes are set to benefit larger consumers with half-hourly (HH) meters, whilst domestic and NHH sites will see a small rise in costs. Consumers outside of London currently experience a rise in Distribution Use of System (DUoS) fixed costs. This is partially offset by a decrease in DUoS unit costs. Most HH sites will also benefit from a drop in TNUoS costs. Whereas domestic and NHH sites face a potential rise in TNUoS costs.

The graph below shows that southern areas are more likely to see a larger decrease in costs than northern areas. HH sites in London, for example, will see TNUoS and DUoS costs decrease by an average of 36%. Whereas HH sites in Scotland will only see an average decrease of 7%. Incidentally, London is also the only area where domestic and NHH sites will see a net benefit from the TCR changes.

Consumers currently taking Triad avoidance action will not see the cost reductions shown below, as that benefit ends in April 2023.

Similarly, sites that have a capacity level which is set too high are likely to face an increase in costs, as they could be placed into a higher charging band. Extra-high voltage sites are not included in the graph below, as they are subject to site-specific tariffs and need more detailed analysis.

HOW EIC PARTNERSHIP CAN HELP

The figures calculated above are based on an average consumer in each charging band. The analysis covers a wide range of consumers with varying demand profiles and cannot easily be applied to individual consumer costs.


The best way to determine exactly how the TCR will affect your business is with our Long Term Forecast Report. This provides your business with a specific breakdown of electricity costs over a 5, 10, 15 or 20 year period. This valuable report will allow you to confidently plan your long-term budget and avoid any nasty surprises.

To learn more read about our Long Term Forecast Report service or contact us today.

Share to :

More News

You might also be interested in these posts

FAQs

See a selection of our most frequently asked questions.

CONTACT US
Which suppliers does EIC work with?

EIC stands out from other energy consultancies because we’re completely independent.

This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.

Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.

We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.

What if I am already with an energy consultancy?

If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.

It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.

What happens after the energy procurement step?

Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.

When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.

The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.

When is the best time to renew my energy contract?

The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.

Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.

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