Business electricity: power plants and small business electric


The UK’s inefficient power plants are steadily closing down. What will replace out-of-favour coal generation and what are the implications for SMEs?

As Eggborough in Yorkshire becomes the latest coal-fired plant to be declared uneconomic and scheduled for closure (not least because of incoming stricter EU rules on air quality), there are questions over UK energy supplies this winter.

The National Grid has been keen to stress the low risk of blackouts (or ‘brownouts’) but not everybody is convinced. A recent report showed margins of error that would be a concern for many.

It is far from clear that blackouts have been avioded. Jefferies, the investment bank, calculates that for 2016-17 just 53 gigawatts of capacity will be available to meet forecast peak demand of 56GW, according to a recent FT story by Christopher Adams. “This would be the first time in living memory that the UK could not cover peak demand with dispatchable generation,” said Peter Atherton, the bank’s utilities analyst in the FT’s analysis.

Gas for business prices

Hopes are increasingly pinned on gas fired power stations.

The ‘gas revolution’ has had significant benefits for many (especially the US). But, while gas prices are still low enough to make gas UK business electricity generation viable in the UK, the pace of building of new gas power stations is too slow to take up the slack left by the abandonment of coal.

A move to renewables has also been touted as heralding the future of cheap business electricity. However, renewables still have a long way to go before they can provide enough reliable power, not least because of the heavy reliance on gas-fired heating. A recent paring back of Government subsidies will likely constrain the rate of growth in renewable business electricity generation. A lack of expensive energy storage infrastructure also acts as a restriction.

Over the longer term, better cross country links – known as the supergrid – will help flatten out peaks and troughs in renewable energy generation and match areas of unmet demand with areas of oversupply.

For the UK, the elephant in the room is nuclear power.

Business electricity prices

As a pioneer of nuclear power, the UK still generates about 17% of power from nuclear sources, far below France’s more than 75% but still placing the UK in the top 20 nuclear generators.

Yet, here too, uncertainty reigns.

Many nuclear energy plants are ageing and a wave of acquisitions has changed the ownership of many nuclear assets several times in recent years. Concerns over safety that mounted in the wake of the Fukushima disaster have contributed to a dearth in funding for nuclear.

French energy group EDF is leading the construction of the first of a new generation of UK nuclear plants at Hinkley in Somerset. The involvement of Chinese partners has raised eyebrows and delays mean the 2023 target completion date has been dropped.

Criticism of the £24.5 billion plant has centred around the Government’s guarantees for both loans and the price of electricity generated, which is substantially above commercial electricity rates. The Government has stressed the secure, low carbon nature of the electricity generated.

Government plans to ‘double down’ and get Chinese companies to build other new reactors, according to an FT story by George Parker and Christopher Adams, are seen by many industry figures as ill advised.

Cheapest business electricity

While business electricity suppliers have adequate power to meet demand, prices rises are likely to remain modest. Taking advantage now could be a sensible strategy as an array of unpredictable events can influence business electricity tariffs.

Even those locked into a long contract could find that paying the exit fees still leaves them significant savings. And doing this comparison doesn’t have to be onerous: just 20 minutes is enough for us to quickly compare business electricity suppliers and switch you to a new deal (with us taking care of the paperwork). Give us a call on 0330 0100 251 (or request a call back using our form).

Find out more about business electricity at our dedicated page.

Related Articles

Powerlines-into-sunrise

Energy News – 27/06/2017

A deal with the DUP may be yet to materialise, but that hasn’t stopped the Queen’s speech going ahead, wit...

Read More

Switching just got simpler for micro businesses

45% of micro businesses are stuck on expensive deals New regulations from the CMA will make it easier for thes...

Read More
Business-electricity-coal-power-to-end-by-2023-big-coal-stockpile-at-sunrise

Energy News 16/06/2017

Michael Gove is appointed energy secretary, suppliers continue to fall short on digital offerings and global e...

Read More
Excellent, 9.7 / 10

Extremely helpful and clear to understand

"I have found the information and assistance to be very clear, and helpful. I was helped through the process of switching electricity supply by personal switching assistant Suhan Ashan who was not only helpful, but very patient in explaining all of the queries which I had and also researching the estimated KwH for our newly acquired office premises, as we had no previous tenant information."

This review was posted by Sue Williams on the 24th of July 2017

Jessica help us arrange new deals for …

"Jessica help us arrange new deals for our start up business which was greatly useful particularly in time during busy setting out period"

This review was posted by Allan on the 21st of July 2017

Really good doing business with Mark …

"Really good doing business with Mark Weeks and SwitchMyBusiness. Getting good energy deals for not-for-profit organisations are a nightmare but Mark made it really easy for us. Very many thanks, well done!"

This review was posted by Tony Smith on the 20th of July 2017

Spoke with Mark Weeks great guy always …

"Spoke with Mark Weeks great guy always phoned back or email when he said he would and was a great help. Would use him again any time."

This review was posted by Duncan Winton on the 20th of July 2017

Courteous and knowledgeable.

"I had my business transfer handled by Mark Weeks, he was courteous and knowledgeable about the various different tariffs on offer and made the process quick and simple. I would definitely recommend their services."

This review was posted by Lawrie Sharp on the 19th of July 2017