Since April 2017, electricity suppliers have been legally obliged to categorise and bill customers who had been originally classified as “Profile Class 5 to 8 as half hourly (HH). Although in most cases this has not required a change of meter, such clients have been faced with new and additional costs such as site capacity charges, meter operation and data collection costs.

It is a legal requirement for all end-users with a HH meter to appoint a meter operator to maintain their metering and communications equipment that facilitates remote meter reading. Many P272 clients have failed to do so and as a result, energy suppliers have appointed a MOP for the client and imposed further costs that can equate to £600 per annum.

In addition to new MOP costs, energy suppliers are typically charging separately for “Settlement” data collection and aggregation charges. This covers the cost of collecting and processing the data from the HH meter in order to manage Settlement and customer billing requirement.

End-users can appoint their own data collector. The benefits of this approach are invariably a significant cost saving and full access to the HH data which will facilitate better energy management and more effective energy contract renewals.

Our experience would strongly suggest many new HH customers are being charged excessive rates for these new costs, along with facing such issues as being misclassified as sites requiring additional site capacity charges or being allocated excessive site capacity levels which incur significant new costs.

If you believe that you are experiencing any of the above, please give us a call and UCR will investigate on your behalf and establish what commercial savings are available.

The cost of a kWh paid for by a reasonably sized commercial end-user, typically classified as a half hourly metered site, is made up of the wholesale cost of electricity plus non-energy costs, which covers such elements as use of the wires to get power from the generator to the meter, physical losses, government taxes and levies.

Ten years ago, non-commodity costs represented approximately a third of the total price paid. Today the figure is well over half and forecast to rise to 60% within 2 years……

Between October 2016 and October 2017, the commodity cost element of electricity rose by approximately 5%. Since the turn of the year, or in only 5 months the “average” wholesale cost of electricity has risen by some 20% to well over 6p kWh.

Government taxes and levies have risen from less than 3p kWh in 2016 to well over 4p kWh in 2018. Use of system costs are typically 2p kWh giving an overall benchmark of +12p kWh.

Electricity commodity costs are increasingly prone to volatility.

Electricity is not readily storable, and its day to day price is driven by traders and speculators. Their “sentiment” is influenced by everything from physical disasters and political uncertainty to how hard the wind is blowing over the UK, the cost of oil and gas…… and is therefore difficult to predict.

The wholesale cost of electricity and gas for the coming year 2018/19 has risen by over 20% between February and May 2018. If these ups and downs are primarily driven by the “Trump effect” and his actions relating to North Korea, Iran and World Trade we should be seriously concerned by the potential and rapid impact on prices of the talks in Singapore failing…. although, temporary supply shortages caused by the “maintenance” season and how hard the wind is blowing cannot be ignored.

In the absence of robust models to forecast future electricity costs it may be worth considering historic pricing levels to suggest where cost might be going……. Twenty years ago, “average” wholesale electricity costs peaked at 9p kWh rather than the +6p today.

Based on current data, over the next 2 years non-commodity and use of system costs will typically add a further 1p kWh all things being equal. And, to accentuate the overall increase in energy costs the Climate Change Levy (CCL) rate will rise from this year’s 0.583 p kWh for electricity to 0.847p kWh in 2019, a rise of 0.264p kWh.

Sorry, no good news today, but let’s hope Kim and Donald get on….

Earlier this week a government-commissioned review led by Charles Hendry, former Minister of State for Energy and Climate Change, backed plans to develop tidal energy facilities, most notably a tidal lagoon in Swansea Bay.

The tidal power of the River Severn and it's "Wash" have long been touted as a possible solution to the looming energy gap the country faces. Unfortunately, developing this concept has been incredibly slow and only seems to be being revisited whenever there is a significant increase in the cost of importing electricity.

The concept of tidal energy is relatively straightforward; turbines are strategically placed and are powered by the significant tidal currents beneath the surface of the water. When implemented, this form of energy generation is efficient, significant and has a minimal impact on the environment.

As an island nation, this sort of renewable energy makes an awful lot of sense. In fact, most renewable technologies make sense in the UK. We're surrounded by water, it's pretty windy a lot of the time and we get quite a bit of sunshine. This sort of development should be prioritised well ahead of projects like HS2 and arguable ahead of nuclear projects.

In the long term, the project hopes to build a network of sites, providing significant input to the National Grid. Hopefully the goverment will realise that there needs to be significant investment in the energy infrastructure in this country. While other things may seem important, it's difficult for a train running on overhead power to reach 250mph if there's not enough electricity to power it.

Following successive increases last year, petrol and diesel prices have hit 18-month highs following an announcement by OPEC (the guys that try to regulate the petroleum based markets) that production would be cut. Brent Crude Oil prices (basically, the ones that matter) have doubled since last January and the fall in sterling means we're getting an even worse deal as everyone trades oil in $ (US Dollars).

Is there a silver lining? Well, sort of. In order to meet the OPEC cuts that have been laid out (basically advisory to avoid us running out any time soon), then Russia have to reduce their output. Russia, however, don't have the best track record in keeping promises to OPEC. Additionally, Russia could potentially make short term profits by exceeding these guideline reductions and make a few Rubles while prices are high. This would, eventually, drive the market back down and everyone else would follow suit.

So, this might be temporary or it might be permanent. No-one likes paying more for a commodity, especially when it's so out of their control, but ultimately the price of oil and petroleum based products will always increase as it is a diminishing resource.

Car makers are now having a bit of a scramble to introduce electric cars to the market, something that they realistically should have been doing about 10 years ago. While they're more than happy to sell people gas-guzzling cars and enjoy prosperous partnerships with oil companies, if no-one can afford to fuel the cars, then no-one will buy them.

We'll talk a b it more about the future of transport in a blog later this year, but for now we may all just have to grin and bear it as the cost of driving continues to increase.

2016 saw significant changes in the energy markets. A great deal of this was due to sociopolitical factors (Brexit, US Presidential Election, Syria conflict, IS attacks - unfortunately we could go on). However, another major factor was a shift from traditional methods of energy production to sustainable sources such as wind and solar energy.

A record number of oil and gas firms went bust last year, reflecting the global reaction to the environmental impact of burning fossil fuels, coupled with the improved inefficiencies of renewable resources, particularly solar energy.

Major energy production firms, such as Engie and Drax, are starting to reduce support in their coal-fired power generation plants and invest in renewable technologies.

While we still rely heavily on gas and fossil fuelled electricity plants, we are certainly witnessing a change in the industry that will force energy companies to be more pragmatic in their approach to generation and invest in longer term solutions. Hopefully, this will mean easier access to 100% green energy tariffs and further investment in the energy networks, something that the UK desperately needs.

From April 2017, many businesses in England and Wales will be able to choose their water company. Until now, the company you use has been based on your geographical area, but soon the choice will be yours.

You will be able to choose who manages your fresh and waste water, or split them between different companies. Ultimately, the change will allow you to choose based on service and price instead of being allocated a supplier based on where your premises is located.

These changes should drive competition and add variance to the levels of service and reduce costs. Additionally, opening up the market like this will also give the opportunity for companies to introduce alternative methods of measuring and monitoring water use, allowing you to use your water more efficiently and ultimately reduce your overall usage.

We will soon be contacting clients to confirm their eligibility to change supplier, but until then if you have any questions please don't hesitate to contact your account manager or call our main office on 0116 326 0188.

According to Elexon:

"Since 6 April 2014, all Meters within Profile Classes (PCs) 5-8 must be an ‘advanced’ Meter capable of being read remotely and recording Half Hourly (HH) consumption. However, there is no mandate to settle these HH capable Meters on a HH basis.

P272 proposes to make HH Settlement mandatory for all Metering Systems within PCs 5-8 (where capable metering has been installed), as the Proposer believes that the use of Non Half Hourly (NHH) data is not as accurate and masks individual customer behaviour."

"P272 will be implemented on 1 April 2017."

That's the official word, but what does that really mean?

Basically, anyone with a "Maximum Demand" 05-08 profile class meter, will see a slight change to the way that they're being billed as their meters will provide half-hourly data to the network instead of being read manually by a chap with a torch. This will allow suppliers to balance and monitor usage more actively and efficiently, reducing the risk of estimating usage on these large meters and providing more accurate billing.

You should receive information both from your supplier and from your Distribution Network Operator (DNO - the guys who actually get the electricity to your premises and manage it) informing you of the changes. In terms of your billing, you will see a few more lines of information, as the various aspects of your charges will be split out for you to see instead of you just having a rolled up standing charge, a lot like having an itemised phone bill. You should also benefit from more accurate billing and, if you're not happy with the way that you are being billed, will be able to choose your own Data Collector (DC) and Meter Operator (MOP).

All in all, this should result in better billing and a more efficient energy network for mid-market electricity users.

Following a tumultuous year for the energy markets, 2017 is shaping up to be more stable in terms of pricing, but with the introduction of open water markets for businesses in April and all "Maximum Demand" electricity meters becoming "Half-hourly" as per the P272 Ofgem Code, things are already looking busy.

At UCR, we had a successful year in securing energy contracts for over 9,000 energy supplies. In addition to our regular brokerage offering, we implemented a new buying group for large gas supplies and introduced a domestic offering for our clients wishing to reduce their bills at home.

Our team was able to expand in both sales, support and management, allowing us to reinvest based on our 2015 success and bolster our customer offering.