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We look at lots of electricity bills. As a provider of energy efficient technologies we review our client’s energy costs before calculating the savings that installing our systems will provide.
Our clients typically tell us what they think they’re paying, then their bills reveal that they’re actually paying far more. Even energy managers get it wrong sometimes.
Why don’t they know that they’re paying? Extra changes and levies. Big industrial companies often agree reduced energy rates with their supplier and the extra charges are tacked on afterwards.
Extra charges on energy bills
These extra charges are significant, in many cases accounting for more than the cost of the wholesale energy itself.
Wrapped up in the charges are network and system costs plus levies for decarbonisation.
Figure 1 Indicative break down of energy charges
Non-energy costs are rising rapidly
5 years ago the cost split between energy and non-energy on a typical bill was around 60/40 and is now closer to 50/50. It is expected to be 40/60 by 2018.
Transmission and distribution charges are expected to rise by 35% over the next 5 years, while green levies could increase by up to 150%.
Figure 2 Indicative breakdown of rising non-energy costs
A volatile energy market
Electricity costs are higher in the UK partly because the British government set a minimum price for carbon emissions above that being traded on the EU market. As a result, it costs more for fossil fuel power plants to produce electricity.
Factors said to impact this are:
- Questions around infrastructure in the lead up to Brexit
- Weakness of the pound
- Oil prices impacting gas
- Gas impacting power
How to reduce energy costs
First of all find out what you are dealing with. Check your recent bills and look into the extra charges for an accurate assessment of what you are currently paying.
There are lots of ways that you can improve energy efficiency but one of the most simple is utilising a resource that you already have.
If you’re in the process industry then it’s likely that you have a steam supply that our technology can tap into to generate a reliable and low cost supply of electricity.