The time is now – why you should renew your energy contracts sooner rather than later

When is the best time to renew your energy contract? While this is a difficult question under normal circumstances, in the current climate, it is imperative. With inflation and energy prices hitting all-time highs, it is crucial to renew at the right time to avoid missing out on significant deals.

Without a clear plan to manage your energy bills, you could be at risk of rising prices. So, it is important that you secure your upcoming contract renewals as quickly as possible.

Let’s take a look at why you should secure your renewals sooner rather than later.

Finding flexibility

Deciding when to renew can be confusing. You will also need to consider various contractual terms, which can be time-consuming. To fully understand the best options for your business, you must first understand your current energy usage and areas of high energy consumption throughout your sites. Factors such as the contract length, fee, and rate should also be taken into consideration.

Securing a fixed contract at the wrong time could mean that your business pays more for its energy, compared to the current market rate. This could lead to you falling behind those competitors that chose to renew their energy contracts at a different point in time, or decided to be more flexible. A flexible energy contract allows your energy bills to mirror the peaks and troughs of the energy market. With a flexible contract, you can also spread out the purchasing points – giving you a wider time frame to spread out any risks of fluctuations in the market.

Avoiding high prices

It’s no secret that energy prices are sky rocketing. Many homes and businesses are now slipping into energy poverty, due to colossal price hikes. Choosing the wrong contract could expose your business to these high price risks.

Looking at the renewal options, and obtaining quotes as far ahead as possible, can help to reduce this risk. While waiting it out until prices go down may seem appealing, it is not advised. Putting in place a consistent and reliable plan of action will free up your time and finances – so your business can focus on other priorities.

Looking ahead

The energy market can be incredibly hard to predict, so securing the right contract is vital. And flexible procurement allows for long-term planning, which can save you time later down the line. For example, putting in place a long-term flexible contract means that you will spend less time assessing the current energy market, while your flexible contract continues – and our experts can handle the price fluctuations for you.

But good risk management is still vital when deciding on the best time to renew your contract. If you are not due for renewal yet then you have time to think about the most advantageous options for your business.

How can EIC help?

Understanding and choosing the best energy solutions for your business can be confusing and tiresome. There are many factors to take into consideration when deciding which contract is right for you – especially in the current energy climate.

EIC has expertise in flexible energy procurement, which can help reduce your costs. Flexible procurement also offers adaptability, in an ever-changing commercial landscape. Budget certainty will become key to your company’s survival, and flexibility will become crucial.

EIC can scan the energy markets to find a flexible energy contract for you, helping you to make savings. You can count on our expert traders, who constantly monitor the markets to find the best prices. We look to engage suppliers on the basis of their contract features and functionality, transparency around the price-fixing mechanism, and the supplier’s account management fee.

Get in touch today to find out more about how EIC can help you find the right contract for you.

Britain running on sunshine as summer demand falls

The changes have come from an evolution in how energy is being used, and those who successfully manage these demand patterns, particularly if combined with Demand Side Response (DSR), could see significant cost savings.

Analysis from EIC has shown that maximum summer demand (seen between May and August) has fallen 17% in the last decade. From a peak of 44GW in 2012, maximum consumption for the current summer has fallen to just 35GW.

This near 10GW loss in demand is similar to the reduction seen during the winter. Furthermore, it’s not only peak consumption that’s been reduced but baseload generation. Minimum summer demand has fallen by 19% since 2009. How much of this is down to efficiency improvements or consumption moving behind the meter is unclear. However, the change does mean National Grid has nearly 10GW less electricity demand to manage on its transmission network.

The trend can be seen more clearly when broken down by month. Average peak demand during May 2012 was over 39GW. This year that figure was just 31.5GW, a reduction of over 7GW in only six years.

Improving energy efficiency

The cost of LED lighting halved between 2011 and 2013. During this time, consumers switching towards the more efficient bulbs helped facilitate a strong drop in demand. This could be helped further with news that the EU will ban the use of halogen lightbulbs from 1 September 2018.

Another major explanation for the demand drop, aside from efficiency improvements in appliances and lighting, is the significant growth in small-scale on-site solar capacity over the same period. Small-scale distribution connected solar has a capacity of under 4KW but the number of installations has grown from under 30,000 in 2010 to nearly 900,000 in 2018. An increase of almost 2,900%.

The total capacity of the small-scale solar now available is over 2.5GW, which is not far off the total capacity for the new Hinkley Point C nuclear power station.

As the use of small-scale solar (the type typically installed on housing or commercial property) has grown demand has fallen. More and more of within-day demand is being met by onsite generation. Consumers can take advantage of the bright and warm summer weather conditions to generate their own solar power, thus reducing the call for demand from the transmission network.

The solar impact

The introduction of high volumes of solar generation to the grid – total capacity across all PV sites is over 13GW – has also significantly altered the shape of demand. Consumption across a 24 hour period has flattened in recent years.

The traditional three demand peaks (morning, early afternoon, and evening) have shifted closer to the two peak morning and early evening winter pattern. The ability to generate high levels of embedded – behind the meter – generation during the day in the summer has flattened and at times inverted the typical middle peak. This has left the load shape peaking in early morning (as people wake up) and later in the evening, as people return home from work.

The absolute peak of the day has also shifted in time, moving from early afternoon to the typical early evening peak of 5-5:30pm, again similar to the winter season.

The below graph shows the change over time of the July load shape, which highlights both the reduction in demand and the change in shape, with consumption flattening during daylight hours as a result of behind the meter solar generation dampening network demand. With electricity costs – both wholesale and system – reflecting supply and demand, if consumption is being changed, then it also has an impact on these costs.

Stay informed with EIC

Our in-house analysis highlights the impact of onsite generation on load patterns and the extent to which demand can be changed by taking action, and subsequently how behaviours can alter a business’ energy costs.

If you can shift demand away from historical high consumption periods, you can cut your energy costs and make significant savings. One such way to do this is by using smart building controls, such as our IoT-enabled Building Energy Management solution.

To find out more download our brochure, call +44 1527 511 757, or email us.

Our offices will be closed for the Bank Holiday (Monday 29 August 2022).
If you have a query, please contact us from Tuesday 30 August onwards, and we
will be happy to deal with your query then.