How much could your business save?Find out now!
Or, you can call us on:0800 411 8830

Business electricity: the UK’s coming winters of disconnect?


The UK electricity supply margin is set to be squeezed over the next three years, according to a new report from Ofgem. What does this mean for SMEs?

Ofgem’s report comes in response to National Grid’s Future Energy Scenarios for electricity security of supply. The National Grid (NG) report called margins “narrow”, meaning that the NG will need to call on balancing tools such as voltage reduction, maximum generation or emergency assistance from interconnectors. The Supplemental Balancing Reserve (SBR) and Demand Side Balancing Reserve (DSBR) are the extra tools that the NGcould use to help balance the system.

These assurances have not convinced everyone. Some have blamed privatisation and a lack of forethought in energy generation strategy for margins that are too tight for comfort.

Business electricity suppliers

This coming winter seems to less of a worry. For 2015/16, NG has procured ‘additional balancing services’ that should keep the lights on. But there is a “wide range of uncertainty” over the outlook, particularly for 2016/17. Margins could tighten if further power stations close or mothball (which may not be unlikely as it seems, given the age of much of the UK’s generation infrastructure).

Still, Ofgem assured that it has identified potential for the market to respond and reduce the risks to security of supply. The outlook is expected to improve in 2017/18 as some mothballed generating capacity returns to the market. A continued reduction in demand could also have a positive impact.

Despite the small chance of outages, Ofgem conceded that projecting future demand “is inherently difficult”, especially against a backdrop of rapid installation of embedded generation, on-going energy efficiency and the changing nature of the relationship between power demand and economic growth. “This is a key area of uncertainty in the outlook, because understanding demand evolution is challenging,” the report concluded.

Commercial electricity rates

While SMEs probably do not (yet) need to invest in generators, the evident concern over electricity margins could be accompanied by an uptick in business electric rates. The return to market of electricity generators should ease supply pressures but, in the meantime, locking in relatively cheap business electricity now might soon prove to be a prudent move.

Unfortunately, small to medium sized business often lack the time to compare business electricity. Price comparison sites are abundant in the consumer sphere but those helping compare electricity prices for business users are far fewer. When you discount those without specific expertise in small business electricity tariffs, the list is very short indeed.

SwitchMyBusiness.com offers a no-obligation comprehensive comparison of business electricity and gas suppliers in just 20 minutes. Fill in our simple form (also at the top right of this page) or give us a call on 0330 0100 251 now to start saving.

Related Articles

energy news 240217

Energy News – 24/02/2017

What’s been making headlines across the energy world this week? We round up the big stories from the las...

Read More
content calendar download

Free Content Calendar Download

This month we have a free content marketing calendar download for our blog readers and newsletter subscribers....

Read More
Renewable energy sources: what is hydropower?

Renewable energy sources: what is hydropower?

Energy generated by water has been used for thousands of years but only recently to generate electricity. We t...

Read More
Excellent, 9.7 / 10

Excellent communication and help

"The service was always efficient, emails were tesponded to quickly and efficiently. Would definitely recommend"

This review was posted by Nella Mcgregor on the 27th of February 2017

Great Service

"Jessica Purnell was great, she was helpful and everything was easy. I have saved £150 per month! many thanks Jess :-)"

This review was posted by Melanie Baker on the 23rd of February 2017

Thank you Jess Purnell!

"Jess really helped us out with switching suppliers... she wasn't pushy at all and the service was great. Thanks again!"

This review was posted by Becki on the 23rd of February 2017

Thanks for your help Mark Weeks and Switch My business

"I would like to thank Switch My Business and particularly Mark Weeks for the ease of switching and saving me money! I can highly recommend them. Thanks again Richard Blake"

This review was posted by Richard Blake on the 22nd of February 2017

Aaron Gallagher

"Aaron sorted out a new electricity deal for my church, enabling us to make good savings. We have now received confirmation of our new 3 year plan.During our telephone conversations Aaron was always very polite and efficient. Dawn Marskell"

This review was posted by Dawn Marskell on the 21st of February 2017