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Energy prices were volatile in March, firstly plummeting but then regaining losses overnight. In April and May generally, prices have softened as global commodities have fallen away and in the UK healthy LNG supplies have offset the colder weather.

Currently prices are around similar levels to 2015/2016 and 2017 leaving 2018 an exceptionally high year. We may therefore hope that if prices remain stable, future negotiations should start to show savings.

In general, energy is proving a difficult market to operate in. The big players are haemorrhaging customers, blaming the price cap, whilst smaller players continue to look vulnerable to non-payment of Renewable Obligation and the Smart metering programme looks doomed to missing the deadlines.

Despite an apparent slowdown in renewable generation investment, new records for UK based generation continue to be set.

Hints & tips

The challenging market is driving suppliers to apply their price change clauses more vigorously, therefore, it is important to set customer expectations around this. If they opt for a cheaper price, that does not guarantee that the non-energy costs may not be passed through. To be on the safe side, make sure you check what is included in charges and if you are unsure, ask the supplier to confirm.

Market changes to be aware of

The costs of the power infrastructure are up for review – the Targeted Charge Review (TCR). The Government is looking to change the method of charging, moving away from a p/kWh approach to a fixed fee approach. Though in theory the change will be cost neutral, this will mean some customers are better off and some not. This could also impact longer term contracts i.e. beyond April 2021, particularly those that are not on a fully fixed product.

Helpful advice

Smart metering remains a challenge for the industry and, despite my reservations about the programme in general, there are benefits for smaller customers in terms of future meter reading accuracy – giving you more information to work with and help them reduce usage. Therefore, there is merit in liaising with a customer’s suppliers and facilitating the smart metering implementation.


Article by: Chris Barrett

This is an article from: Insight & Innovation: Issue 2 – click here to read the whole newsletter.