Issue #107 - The Energy Price Issue 📊
How does regional energy pricing affect your business? 🧭 | How is energy bought and sold? 📈 | What’s going on with energy prices? 💡 | #BionicBusinessStory - Pup Up Cafe 🐶 | Words | Tunes | More
The north/south/east/west energy divide 🧭
Welcome to Issue #107 of The Backbone. The free fortnightly newsletter from Bionic
Ever wondered what costs make up your energy bills?
You’re not only paying for the gas and electricity you use each month. Other costs on your bill include the standing charge and additional taxes and levies (like VAT and the Climate Change Levy).
You can find out more in our guide to business energy bills, but let’s look at those standing charges and why having your business in a certain part of the country means you pay more for energy.
📈 What is a standing charge?
The standing charge is paid daily, regardless of how much energy you use.
This covers things like maintenance, repair, and upgrades to the energy supply network (the pipes and cables that get the electricity and gas to your premises), metering costs (installation, maintenance and meter reading), and some government levies (Renewables Obligation and Feed-in Tariffs).
You’re not just paying for the energy — you're helping to fund the national energy system, green energy initiatives, and keeping the network up and running, whether you flick the lights on or not!
The trouble is, these costs vary from region to region, and data from Cornwall Insights shows that SMEs in North Wales and Merseyside are forecast to pay 13% more in electricity bills than similar businesses in London. This works out at nearly £19,000 more in bills on an average like-for-like basis.
📊 Why do energy prices vary by region?
There are four main reasons why energy costs vary by region:
The number of customers the energy company has in an area
The amount of energy the supplier buys from generators in an area
The different charges imposed on the energy supplier by each area's distribution network
Energy usage by customers in an area
If we look at the number of customers the energy company has in an area, this comes down to simple supply and demand. It also feeds into the amount of energy the supplier buys from generators in an area. Basically, the more dense a population, the more energy suppliers can buy in bulk for that area. The means unit costs tend to be a bit lower.
Energy prices are higher in the North West and North Wales mainly because of a mix of higher network costs and lower population density in parts of the area. There’s also the issue of the region having an older and less efficient energy infrastructure. This means a higher investment is needed to maintain or upgrade it.
💡 What can you do to cut your energy bills?
It may sound obvious, but using less energy is the best way to keep costs down.
There are some simple measures you can take, like turning things off when they’re not being used. If you can, you should also make sure your premises are as energy efficient as possible, and switch to more energy-efficient lighting, appliances and equipment. For more details, check our guide to energy efficiency.
Working out when and how you use energy can also help you find ways to cut your usage. Find out more in our guide to conducting a business energy audit.
And finally, you need to make sure you’re on the best possible energy deal. Out-of-contract rates are a lot more expensive than fixed rates. And they’re not protected by a price cap like domestic rates. So it’s important to make sure you fix your rates.
And when comparing energy prices, remember to check the standing charge alongside the unit rate and work out how you can save the most money. If your business operates outside of normal business hours, it’s also worth considering a time-of-use tariff. Find out more in our guide to time-of-use tariffs.
🤝 COMMUNITY
Join our community of small business superheroes 🦸♀️
Small business owners are the superheroes of the high street. But small business owners rarely get their voices heard. Now there’s a place to chat, share advice and help each other through the lows and highs of running a business. To get involved, scan or click the QR code above or click the button below to sign up.
🗞 READ
How is energy bought and sold, and how does this affect prices? 📈
If you’ve ever wondered why the price you pay for energy doesn’t seem to quite tally with rising and falling wholesale prices, it’s largely down to the way energy is bought and sold and the level of risk faced by suppliers.
To give you an idea of how it all works, let’s take a closer look at what the energy market is and how gas and electricity are bought and sold.
What’s going on with energy prices? 💡
Energy prices are currently relatively stable, with some minor rises and falls. The energy price cap is expected to fall at the next review in late May. But what causes price volatility, and should you fix your prices?
While we can’t predict exactly what’s going to happen, this guide looks at some factors that contribute to energy prices, along with graphs of the latest energy price trends, to try and make sense of it all.
🗣 SHOUTOUT
#BionicBusinessStory - Pup Up Cafe 🐶
April was National Pet Month. To celebrate, Bionic chatted with Marcus Ackford, who puts on fun events for different dog breeds all around the UK. We found out what inspires him and what he’s most excited about in the future.
Bionic: What inspires you as a business owner?
Marcus Ackford: Businesses that stay small and successful inspire me. Lots of businesses think growing bigger and better is the only way to be successful, but it’s actually the opposite for me. I think it’s inspiring to run a small business and know when to stop to keep it small and more personal. We never want to be employing 10,000 people. We wouldn’t personally enjoy running a business like that.
B: How did you start the Pup Up Café?
MA: I started Pup Up about three years ago, and the pun is still going strong! I’ve been working in the event sector for the last ten years, but I always wanted to get into the pet industry. So, a few years ago I decided to try mixing my love of events with dogs.
B: What’s your biggest pet peeve as a business owner?
MA: I think the biggest thing for me is sometimes you can put on these events and people don’t necessarily see all the hard work that’s gone into it behind the scenes.
B: What are you most excited about for the future?
MA: We’re just excited to meet more dogs, host more events with more breeds. That’s always been the focus for us.
Check out the Pup Up Cafe website for the latest event info. And click on the Pup Up pug below to read more from this #BionicBusinessStory
📊 BUSINESS
Get your business costs sorted 💷
Bionic is the comparison site for your small business. We compare a range of business essentials to help you save time, money, and hassle.
Our tech-enabled team will answer all your questions in simple terms and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
🎧 LISTEN
Playlist 🎶
When the sun is shining like it has been this week, is there anything better than sitting outside with a spritz in hand, listening to some Brazilian Bossa Nova? We don’t think there is. So we were delighted when Livia, CRM Manager at Bionic, recommended this Bossa Nova Classics playlist. We’ll be playing this one right through until September.
Podcast 🎙
As regular readers will know, we love a history podcast at The Backbone. So (not for the first time), we’re featuring another series from the excellent The Rest Is History podcast. This one is a four-parter on the French Revolution, as chosen by Dan, our Senior Customer Experience Manager. It kicks off with some pretty grisly accounts of the September Massacres and doesn’t really get any less gruesome. So prepare yourself before you listen.
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🏡 HOUSEKEEPING
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🚫 STOP
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