Energy prices are climbing—and there’s little sign they’ll return to pre-crisis levels anytime soon. Despite a brief drop in wholesale gas prices in April 2022, the overall energy market remains volatile and unpredictable. While this is troubling for households, UK businesses are facing even greater challenges.
The Current State of Business Energy Prices
Unlike domestic consumers, businesses are not protected by an energy price cap. This leaves them exposed to dramatic price increases. At Business Energy Claims, we’ve seen clients paying up to 50p/kWh, nearly double the domestic rate of 28p/kWh. Worse still, many of these contracts include hidden commissions from energy brokers—fees that inflate costs without the business’s knowledge.
Large corporations often have procurement teams to secure competitive rates. But SMEs, like care homes, restaurants and schools, are at a disadvantage, lacking the resources and bargaining power to navigate the complex energy market.
Why are Business Energy Prices Rising?
A combination of global and regional factors has created a perfect storm for rising energy costs:
- Extreme weather: Hot summers in Asia and cold winters in Europe have increased energy demand
- Reduced gas supply: Lower imports from Eastern suppliers have depleted European reserves
- Low wind output: UK wind farms have underperformed, reducing renewable energy generation
- Geopolitical tensions: The Ukraine-Russia conflict has disrupted energy supply chains
- Stalled investment: Slow progress in renewable infrastructure has limited alternatives
These factors have made energy prices highly unpredictable, with businesses bearing the brunt of the instability.
What Does the Future Hold for Business Energy Costs?
Unfortunately, the outlook remains bleak. Ofgem has introduced quarterly price cap reviews to protect domestic consumers and prevent supplier collapse, but businesses remain unprotected. In fact, Ofgem has hinted at further price cap increases for households, suggesting that business energy prices may continue to rise.
At Business Energy Claims, we’re calling for greater protection for SMEs, including the introduction of a business energy price cap and mandatory transparency around broker commissions. Without these changes, many businesses will continue to struggle under the weight of rising costs and hidden fees.
How Business Energy Claims Can Help
We specialise in helping businesses:
- Identify hidden commissions in energy contracts
- Recover overpaid costs through energy mis-selling claims
- Navigate the energy market with expert advice and support
With inflation rising and energy costs showing no signs of stabilising, now is the time for businesses to take action.