How to implement energy-saving strategies to reduce your costs and emissions
Last week Zellar was invited to join an expert panel from The Federation of Small Businesses, The Co-operative Bank and Go Get Paid to help hundreds of UK businesses tackle the cost of doing business crisis, at a Financial Support for Business webinar organised by Greater Manchester Chamber of Commerce.
The panel of experts advised on everything from improving cash flow, reducing energy bills, obtaining business grants to creating an effective business plan.
In his section, Reducing energy costs, Mike Chessum, Head of Energy at Zellar unpacked:
The recent changes to the government's energy bill support package to UK businesses
Latest energy price trends
Understanding when to switch energy provider
How to take action to reduce your energy bill
Here’s what Mike had to say.
1. Energy Bill Relief Scheme vs the Energy Bills Discount Scheme
The EBRS scheme which capped wholesale energy prices for businesses has now ended and has been replaced by the Energy Bills Discount Scheme (EBDS).
Unlike EBRS, which was a wholesale price cap at 21.1p/kWh for electric and 7.5p/kWh gas, EBDS is a discount scheme on whatever the price of the wholesale market was on the day you signed your electric and gas contracts.
It’s fair to say that for new fixed contracts signed now, it’s irrelevant and offers no support as the discount only kicks in if the wholesale market rises above 30.2p/kWh electric and 10.7p/kWh gas. Current wholesale energy prices are well below the prices above so the discount will not apply to new contracts.
If you signed a fixed contract after the 30th November 2021, the scheme applies if the wholesale market was higher than the numbers above on the day you signed the contract. Again, the support is very limited. For instance, if the wholesale market was at 50p/kWh for electric when you signed the contract, the discount you will get on the wholesale element of the contract is only 1.961p/kWh. For gas, the discount is only 0.0697p/kWh.
2. What does the current wholesale energy market look like?
The two graphs below show the current wholesale market in the UK. The energy market has softened significantly in the past few months, but prices are still much higher than they used to be before 2022. It does seem that the new price levels are the new normal for energy prices in the UK.
The arrows show what the wholesale markets used to be in 2021 before the large market rise.
The prices shown are wholesale prices only. They do not include standing chargers, supplier profit or take into account when a supplier may have purchased the energy they are selling to customers.
3. Switch or stay?
If your current energy contract is going to expire in the next 6 months, it’s now worth starting to look at what prices would be available to you. As a Zellar customer, we do not charge any broker fees so you can save an average of £600 per fuel if you’re currently using an energy broker to help you with your energy contracts.
4. Take matters in your own hands with an energy action plan.
The reduction in government subsidies is going to bite. Now is the time to take action to reduce your energy usage and at the same time save money, reduce carbon emissions and become more sustainable, which is where Zellar can help.
Zellar helps businesses to measure, plan, activate, report and share their sustainability journey. Our platform recognises that sustainability and cost savings are inextricably linked.
By joining Zellar and becoming more sustainable, your business could save an average of £4,100 - £15k+ depending on the size of your business and how far you take your sustainability journey.
Zellar’s cost saving sustainability plans are based on 5 core pillars.
Measure your energy and emissions with SMART meters and Zellar’s carbon calculators
Take steps to reduce them using the actions in Zellar’s action library
Invest in green technologies in Zellar’s marketplace
Start to generate your own power where possible. ROI has never been greater.
Influence others by using Zellar profile and score to tell your sustainability story, attract new fans to your business.
The strategy is designed to be the most commercially viable so you always choose green technology and generation investments based upon your business operating at its most efficient.
Of course, the goal is always to reduce your emissions and bills to the lowest possible point. So the final step for a true sustainability plan is not designed to deliver cost savings, but instead to balance off any remaining emissions which you are not able to reduce. These could be from any remaining gas/oil fired boilers or due to your travel emissions. Zellar provides offsetting from both international and UK verified offset projects from sustainable forestry in Uruguay to woodland creation in Yorkshire.