Let’s face it, no one loves seeing their energy bills go up. And as a business owner, it can be especially frustrating when energy costs start creeping higher without a clear reason. If you’ve been wondering why your bills have increased, or just want to understand what’s going on behind the scenes, we’ve got you covered.
Let’s break down what influences business energy prices and why the wholesale energy market can be a bit of a rollercoaster.
Why Has My Business Energy Bill Gone Up?
There are a few reasons your energy prices might have risen recently. Some are linked to your specific tariff or usage, while others are broader changes in the energy market itself. Here are the big ones:
End of a Fixed Contract: If you were on a fixed tariff that’s come to an end, you might have rolled onto a variable rate, which can be higher.
Higher Wholesale Energy Costs: The cost suppliers pay for energy (known as the wholesale price) has a huge impact on what you pay.
Seasonal Demand: Colder months mean more heating, which increases overall energy use—and demand can push prices up.
Changes to Business Operations: If your business has grown, changed opening hours or increased production, your energy use could be up too.
What Influences the Wholesale Energy Market?
This is where it gets a bit more complex, but also kind of fascinating. The wholesale energy market is where energy is bought and sold before it reaches your business. And it’s influenced by a whole range of global and local factors.
Here are some of the main ones:
- Global Gas Prices
Natural gas plays a big role in electricity generation in the UK. So, when global gas prices go up, electricity prices usually follow. Factors like reduced supply, storage shortages or increased global demand (like during a cold winter) can all cause prices to spike.
- Weather Events
Extreme weather, whether it’s a particularly cold winter, a heatwave or even storms, can have a big impact. Cold weather drives up demand, while things like low wind levels can affect renewable energy generation, meaning we rely more on fossil fuels (which are more expensive).
- Geopolitical Issues
Events around the world, such as conflicts or trade disputes, can disrupt the energy supply chain. When energy becomes harder to get hold of, prices tend to rise.
- Infrastructure and Maintenance
Planned or unexpected outages at power plants, gas terminals or interconnectors (which bring electricity from other countries) can reduce supply and push prices higher.
- Carbon Pricing and Green Levies
As the UK works toward net zero, costs linked to carbon emissions and environmental levies have become part of the picture. These can influence wholesale prices and in turn, your energy bills.
Can I Do Anything About It?
While you can’t control the wholesale market, there are still things you can do to manage your energy costs:
Review Your Contract: Make sure you’re on a deal that suits your business. If you’re unsure, Ruby can help you compare options.
Upgrade to a Smart Meter: This helps you understand when and how you’re using energy, which is the first step in cutting waste. We provide our customers with the opportunity to have a smart meter installed free of charge!
Improve Efficiency: Small changes, like switching to LED lighting or optimising heating times, can add up over time.
Get Expert Advice: Sometimes, the best thing to do is speak to someone who knows the market. That’s where we come in.
Submit a Meter Reading: Make sure your bill reflects your actual usage, not an estimate. Submitting regular readings helps avoid overpaying.
Let’s Make Sense of Your Energy Costs
If your bills have gone up and you’re not sure why, don’t sit and stress about it. At Ruby Energy, we’re here to help you understand what’s going on and explore ways to reduce your energy costs moving forward.
Click here to get your no-obligation quote and discover how the Ruby Way can help your business stay in control, no matter what the market’s doing.
