Even in the best of circumstances, it is difficult to forecast energy costs, and the current level of market instability makes it impossible to state whether energy prices will decrease this year. Despite the fact that prices have fluctuated throughout the year, the general trend has been upward.
Energy researchers and research firm Cornwall Insight have predicted that prices may continue to rise well into 2024.
The prices you face won’t change for the rest of the year and into 2023, though, thanks to the revelation that the energy price guarantee has capped prices for both households and businesses.
The only approach to maintain bill stability in a volatile market and guard off future price increases is to fix your energy prices.
Although it’s impossible to forecast if prices will go up further, they have increased dramatically over the past year, and anyone who had a fixed plan in September 2021 would have saved a lot of money on their energy costs.
It’s doubtful that you’ll have to switch until at least April of next year due to the implementation of the energy price guarantee in October. This is due to the fact that most firms’ energy costs will be limited till then.
When in doubt, think about performing a Business Energy Comparison of rates from various trusted energy providers in the UK.
It’s crucial to contact your provider right away to work out a payment plan if you are struggling to pay your company’s energy costs. In under 30 days of your missing payment, if you don’t resolve the issue with your supplier, they may take steps to cut off your energy supply.
The chief executive of Centrica, the holding firm of British Gas, has said there is “no reason” to anticipate gas prices to decline sometime soon, despite the fact that it is challenging to foresee exactly what will transpire in such a volatile energy market. He even predicted that there would be high petrol costs over the following 1.5–2 years.
The government seems to be dealing with tension by intervening and assisting customers by reducing the VAT or other fees that are not clearly connected to the wholesale energy prices.
Trade organizations have urged the government to provide financial assistance to company owners in the form of reduced energy-related VAT, a commercial energy price cap, as well as a Government Emergency Energy Grant for SMEs – basically, Covid-style aid for this most recent crisis.
Now that a price limitation on commercial energy has been established, there are few specifics available. Beginning on October 1, the price cap will be in effect for six months.
After three months, there’ll be a review to determine if the cap should be increased for particularly fragile sectors, such as the hotel industry.
Businesses must lock in current prices as quickly as possible if they want to protect themselves against out-of-contract charges and any likely new price increases.
It might be beneficial to consider how and when you use gas and electricity if you wish to reduce the cost of your company’s energy bills. Think about the following, then:
• Examine the times you heat your building.
• Turn off appliances,
• monitor the weather,
• and get a smart meter to cut costs
• Be aware of the price of water.
• When they’re not in use, turn off the lights, or install light sensors.
• Encourage your team to be energy conscious.
• Ensure your structure is airtight.
• Avoid using paper as much as possible.
• Obtain an energy audit.
But you must also maintain reality. If your energy prices increase, you could still notice it on your income statement even if you implement all practical energy-saving strategies and drastically reduce your consumption since you still need to consume a minimum amount of energy to keep your business operating.
There are different business energy tariffs available; if you select the incorrect one, your company will spend too much on energy supply.
Additionally, because you are bound to the terms of the contract when you sign a business energy agreement, you may be overpaying for up to 5 years.
Here’s why it absolutely is worthwhile to compare business gas and business electricity packages, even if you might be thinking if it’s really worth the effort.
If you haven’t yet changed your business energy supplier, your existing supplier will put you on an exorbitant “out of contract rates” arrangement. These prices may be up to double the cost of contracted rates and even more so in the present market.
When switching, you should be aware that the prices you receive will depend on a variety of factors, including how much energy you use, where your business is located, and whether or not your company is financially stable.
If your company has a low credit score, you may wind up paying higher prices since your company is seen to be riskier.
Additionally, it’s important to be aware that corporate energy providers do not provide dual fuel contracts, although if you subscribe to a gas and electricity arrangement from the same provider, those will still be two different energy contracts.
One of the two situations listed below will occur to your energy contract if your company relocates:
• It will be moved to your new place of business.
• It will be canceled, and you’ll have to establish a new agreement at your new location.
It’s uncommon to be given the option to cancel a commercial energy contract early after signing one.
This is so that your supplier won’t lose money if you terminate the contract before the predetermined end date since it will purchase the appropriate amount of energy to last you the whole period of the contract.
Moving your company is a rare opportunity to terminate your existing business energy contract slightly earlier and transfer to a better price, but you must carefully consider your alternatives before making the transition.
Your provider will handle the transfer of your current energy contract to your new location, ensuring no problems arise and that you are only charged for the period beginning on the day you relocate into the new location.
If you decide to transition to a new agreement with a different provider, you will need to make arrangements for the settlement of your last commercial energy bill or for any refunds you may be owed if your account has been positive.
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The Commission is proposing an emergency intervention in Europe’s energy markets to tackle recent dramatic price rises. The EU is confronted with the effects of a severe mismatch between energy demand and supply, due largely to the continued weaponisation by Russia of its energy resources. To ease the increased pressure this puts on European households and businesses, the Commission is now taking a next step in tackling this issue by proposing exceptional electricity demand reduction measures, which will help reduce the cost of electricity for consumers, and measures to redistribute the energy sector’s surplus revenues to final customers. This follows on from previously agreed measures on filling gas storage and reducing gas demand to prepare for the upcoming winter. The Commission is also continuing its work to improve liquidity for market operators, bring down the price of gas, and reform the electricity market design for the longer term. The first response to tackle high prices is to reduce demand. This can impact electricity prices and achieve an overall calming effect on the market. To target the most expensive hours of electricity consumption, when gas-fired power generation has a significant impact on the price, the Commission proposes an obligation to reduce electricity consumption by at least 5% during selected peak price hours. Member States will be required to identify the 10% of hours with the highest expected price and reduce demand during those peak hours. The Commission also proposes that Member States aim to reduce overall electricity demand by at least 10% until 31 March 2023. They can choose the appropriate measures to achieve this demand reduction, which may include financial compensation. Reducing demand at peak times would lead to a reduction of gas consumption by 1.2bcm over the winter. Increasing energy efficiency is also a key part of meeting our climate commitments under the European Green Deal.
The Commission is also proposing a temporary revenue cap on ‘inframarginal’ electricity producers, namely technologies with lower costs, such as renewables, nuclear and lignite, which are providing electricity to the grid at a cost below the price level set by the more expensive ‘marginal’ producers. These inframarginal producers have been making exceptional revenues, with relatively stable operational costs, as expensive gas power plants have driven up the wholesale electricity price they receive. The Commission proposes to set the inframarginal revenue cap at €180 EUR/MWh. This will allow producers to cover their investment and operating costs without impairing investment in new capacities in line with our 2030 and 2050 energy and climate goals. Revenues above the cap will be collected by Member State governments and used to help energy consumers reduce their bills. Member States trading electricity are encouraged, in a spirit of solidarity, to conclude bilateral agreements to share part of the inframarginal revenues collected by the producing State for the benefit of end-users in the Member State with low electricity generation. Such agreements shall be concluded by 1 December 2022 where a Member State’s net imports of electricity from a neighbouring country are at least 100%.
Thirdly, the Commission is also proposing a temporary solidarity contribution on excess profits generated from activities in the oil, gas, coal and refinery sectors which are not covered by the inframarginal revenue cap. This time-limited contribution would maintain investment incentives for the green transition. It would be collected by Member States on 2022 profits which are above a 20% increase on the average profits of the previous three years. The revenues would be collected by Member States and redirected to energy consumers, in particular vulnerable households, hard-hit companies, and energy-intensive industries. Member States can also finance cross-border projects in line with the REPowerEU objectives or use part of the revenues for the common financing of measures protecting employment or promoting investments in renewables and energy efficiency.
In a further intervention in the electricity market rules, the Commission is also proposing to expand the Energy Prices Toolbox available to help consumers. The proposals would allow below cost regulated electricity prices for the first time, and expand regulated prices to also cover small and medium-sized enterprises.
As Commission President von der Leyen announced on Wednesday 7 September, the Commission will also continue to pursue other avenues to bring down prices for European consumers and industry, and ease pressure on the market. The Commission will deepen its discussion with Member States about the best ways to reduce gas prices, also analysing various ideas for price caps and enhancing the role of the EU Energy Platform in facilitating lower price agreements with suppliers through voluntary joint purchasing. The Commission will also keep working on tools to improve liquidity on the market for energy utilities, and review the Temporary State aid Crisis Framework to ensure that it continues to enable Member States to provide necessary and proportionate support to the economy while ensuring a level playing field. At the Extraordinary Energy Council on 9 September, Energy Ministers of Member States endorsed the Commission’s ongoing work in these areas.
The Commission has been tackling the issue of rising energy prices for the past year, and Member States have deployed many measures at national level which the Commission provided through the Energy Prices Toolbox adopted in October 2021 and expanded in Spring 2022 with the Communication on short-term market interventions and long-term improvements to the electricity market design and the REPowerEU Plan. The energy market situation has worsened considerably since Russia’s invasion of Ukraine and its further weaponisation of its energy resources to blackmail Europe, which exacerbated an already tight supply situation after the COVID-19 pandemic. The Commission has already proposed new minimum gas storage obligations and demand reduction targets to ease the balance between supply and demand in Europe, and Member States swiftly adopted these proposals before the summer.
As Russia has continued to manipulate gas supplies, cutting off deliveries to Europe for unjustified reasons, markets have become tighter and more nervous. Prices increased further over the summer months, which have also been marked by extreme weather conditions caused by climate change. In particular, droughts and extreme heat have had an impact on electricity generation by hydropower and nuclear, further reducing supply. That is why the Commission, in the form of a Council Regulation based on Article 122 of the Treaty, is now proposing an emergency intervention in the electricity market, with common European tools to tackle high prices and address imbalances in the system between suppliers and end-users of electricity, while preserving the overall functioning of the internal energy market and preventing security of supply risks.
President Ursula von der Leyen said: “Russian aggression and manipulation is affecting global and European energy markets, and we need to be resolute in our response. Today, the Commission is bringing further proposals to the table which Member States can swiftly adopt and implement, to ease the pressure on households and businesses. We continue to stand united in the face of Putin’s weaponisation of gas and ensure we minimise the impact of high gas prices on our electricity costs in these exceptional times.”
Executive Vice-President Frans Timmermans said: “These unprecedented measures are a necessary response to the energy supply shortages and high energy prices affecting Europe. Demand reduction is fundamental to the overall success of these measures: it lowers energy bills, ends Putin’s ability to weaponise his energy resources, reduces emissions and helps rebalance the energy market. A cap on outsize revenues will bring solidarity from energy companies with abnormally high profits towards their struggling customers. Above all, however, this crisis underlines that the era of cheap fossil fuels is over and that we need to accelerate the switch towards homegrown, renewable energy.”
Commissioner for Energy Kadri Simson said: “We are making an emergency intervention in the design of our power market today, capping revenues for lower cost electricity producers, and allowing exceptional measures on regulation of prices for businesses and households. This will enable Member States to raise and redirect revenues to those in need in this difficult time, without undermining the long-term functioning of the market”
Commissioner for Economy Paolo Gentiloni said: “Our proposal for a solidarity contribution from fossil-fuel industries will ensure that we tackle the current energy crisis in a spirit of fairness. In these extraordinarily difficult times for so many, fossil-fuel companies have been enjoying abnormally high rents. So it is essential that they pay their fair share to supporting vulnerable households and hard-hit sectors, as well as towards the mountain of investments before us in renewables and energy efficiency. Because in the face of Putin’s weaponisation of energy, we need a collective effort of solidarity in order to build a more secure and sustainable Europe.”
Hungary’s transition to clean energy can enable it to achieve greater energy security and independence as it navigates the supply challenges that Russia’s invasion of Ukraine has created for countries across Europe, according to a new in-depth policy review by the International Energy Agency.
Hungary has a strong starting point for its energy transition thanks to rapid growth of solar PV and a solid base of nuclear power. But it still has considerable work ahead to achieve its objectives for emissions reductions and energy sovereignty.
Since the IEA’s last in-depth energy policy review in 2017, Hungary has increased its climate ambitions. In 2020, it became one of the first countries in Central Europe to put a carbon neutrality goal for 2050 into law and presented a long-term National Clean Development Strategy the following year. Hungary is aiming for 90% of its electricity generation to come from low-carbon sources by 2030.
However, Russia’s invasion of Ukraine has created a new set of energy security challenges in Europe. In response to the current global energy crisis, Hungary declared a state of energy emergency in July 2022 that allowed the government to increase domestic gas and coal production, secure additional gas imports from Russia and increase the output of the Mátra coal power plant. The government is also considering extending the lifetime of the four reactors at the country’s Paks nuclear power plant, which guarantees almost 50% of Hungary’s electricity supply.
“Prioritising energy efficiency and renewables is a pragmatic approach that aligns with Hungary’s energy and climate goals in the short term and the long term. It can avoid increases in both fossil fuel imports and emissions,” said IEA Executive Director Fatih Birol as the IEA released the report today.
Attila Steiner, Hungary’s State Secretary for Energy and Climate Policy, said: “Hungary has a strong commitment to renewables. As the next step, the government’s priority is to upgrade the national grid to be capable of integrating the rapidly growing electric capacity generated by weather-dependent energy sources. However, to guarantee supply security and reach our ambitions climate goals, it is imperative to maintain or even increase our reliable and emission-free nuclear capacity as well.”
As a landlocked country, Hungary is today heavily reliant on Russia for natural gas, oil and nuclear fuel imports and new nuclear investment. The IEA review calls on Hungary to reduce fossil fuel consumption and diversify its energy sources towards a broader portfolio of renewables by drawing on the considerable potential of its wind and geothermal energy resources as well as extending the lifetime of existing reactors, where safety permits.
At the same time, Hungary should make the best use possible of its energy market interconnections, which it has significantly increased in recent years, to get energy supplies from diverse routes, sources and suppliers. The IEA report highlights that Hungary has a critical role to play in the major task of improving Central and Eastern European countries’ links to regional gas storage sites and new LNG terminals elsewhere in the European Union.
The IEA report recommends that the Hungarian government adopt additional targets and policies to lower fossil fuel consumption, increase energy efficiency and promote investment in clean energy technologies, skills and jobs. Paying close attention to ensuring a fair transition, including providing adequate support for people and communities associated with the Mátra coal plant, will be crucial to secure a smooth phase-out of coal.
“A stronger focus on investment in clean energy technologies is critical,” Dr Birol said. “Hungary has a huge opportunity to develop hydrogen for industrial sectors. Continued investment in developing its solar PV, geothermal and wind resources will allow Hungary to reduce its reliance on natural gas and coal in both heating and power generation. Hungary possesses the technologies it needs to advance its transition toward a clean and more secure energy system, which in turn will improve regional energy security.”
Global employment in the energy sector has risen above its pre-pandemic levels, led by increased hiring in clean energy, according to a new IEA report that offers the first worldwide benchmark for employment across energy industries.
The inaugural edition of the World Energy Employment Report, which will be published annually, maps energy sector employment by technology and value chain segment. The report provides a data-rich foundation for policy makers and industry decision makers to understand the labour-related impacts of clean energy transitions and shifts in energy supply chains following Russia’s invasion of Ukraine.
The amount of energy jobs worldwide has recovered from disruptions due to Covid-19, increasing above its pre-pandemic level of over 65 million people, or around 2% of the total labour force. The growth has been driven by hiring in clean energy sectors. The oil and gas sector, meanwhile, saw some of the largest declines in employment at the start of the pandemic and has yet to fully recover.
With the recent rebound, clean energy surpassed the 50% mark for its share of total energy employment, with nearly two-thirds of workers involved in building new projects and manufacturing clean energy technologies. At the same time, the oil and gas sector is also experiencing an upswing in employment, with new projects under development, notably new liquefied natural gas (LNG) infrastructure.
The energy sector is set to see its fastest employment growth in recent years in 2022, however high input costs and inflationary pressures are adding to hiring and supply chain challenges already present in some regions and subsectors, such as solar, wind, oil, and gas. Policy responses to the pandemic and Russia’s invasion of Ukraine, including the US Inflation Reduction Act, will continue to add to new hiring demand and to shifting the status-quo of global energy supply chains.
Energy jobs counted in this report span the value chain, with around a third of workers in energy fuel supply (coal, oil, gas and bioenergy), a third in the power sector (generation, transmission, distribution and storage), and a third in key energy end uses (vehicle manufacturing and energy efficiency). More than half of energy employment is in the Asia-Pacific region. This reflects rapidly expanding energy infrastructure in the region and access to lower-cost labour that has enabled the emergence of manufacturing hubs that serve both local and export markets, notably for solar, electric vehicles and batteries. China alone accounts for 30% of the global energy workforce.
In all IEA scenarios, clean energy employment is set to grow, outweighing declines in fossil fuels jobs. In the Net Zero Emissions by 2050 Scenario, 14 million new clean energy jobs are created by 2030, while another 16 million workers switch to new roles related to clean energy. New energy jobs may not always be in the same location nor require the same skills as the jobs they replace, requiring policy makers to focus on job training and capacity building to ensure that energy transitions benefit as many people as possible.
“Countries around the world are responding to the current crisis by seeking to accelerate the growth of homegrown clean energy industries. The regions that make this move will see huge growth in jobs,” said IEA Executive Director Fatih Birol. “Seizing this opportunity requires skilled workers. Governments, companies, labour representatives and educators must come together to develop the programmes and accreditations needed to cultivate this workforce and ensure the jobs created are quality jobs that can attract a diverse workforce.”
Around 45% of the world’s energy workers are in high-skilled occupations, compared with about 25% for the wider economy. Some fossil fuel companies are retraining workers internally for positions in low-carbon areas to retain talent or to maintain flexibility as needs arise. However, this is not an option everywhere, and ensuring a people-centred and just transition for affected workers must remain a focus for policy makers, especially in the coal sector where employment has been declining consistently for several years.
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