POWWR Reveals UK Businesses are Spending 12.6% more for their energy

What businesses pay for their energy varies massively region upon region

[Manchester, 10^th July 2024] – POWWR, a respected energy software provider, today reveals that the average UK business is now spending £5160 for their energy annually, 12.6% more than last quarter. This is, however, 17.7% less than what they were spending this time last year and around half what they were spending at the peak of the energy crisis in Q4 2022.

Due to the wide variety of climate conditions seen across the UK and the type of industries that frequent each region, there remains significant variances between what businesses pay for their energy region to region. For example, companies in the North East of England pay the least (£4300) for their energy, but those in North Wales pay over £2400 more (£6761).

POWWR’s third Quarterly Energy Barometer Report is based on over 361,000 data points, meaning it provides unprecedented insight into how much energy UK businesses are consuming, and what they are paying for it. The report shows that energy usage across the UK continues to decline quarter on quarter, likely due to initiatives brought upon by a mixture of environmental concerns and fears of rising energy prices. The average UK business now consumes 23 MwH of energy a year, 12.3% less than they did last year. However, it is very large companies that continues to drive the trend. Energy usage of small and medium sized businesses has actually slightly increased over the same period.

“Whilst it is great that UK businesses are using less and less energy, the average amount they spend on electricity has increased. This is down to a number of factors. Firstly, despite market conditions being far more stable, the unit cost of energy has actually increased this quarter due to concerning weather patterns. Secondly, there has been an industry-wide increase to the standing charge (the daily charge set by the supplier regardless of energy usage). This has mostly been felt by smaller companies who have historically been likely undercharged. The good news is that the change to the standing charges is a natural correction that shouldn’t be seen again for quite some time,” explains Matt Tormollen, CEO at POWWR.

With the huge variances in energy prices over the past couple of years, it is no surprise that UK business leaders continue to want to lock in their energy costs for extended periods of time. Not only is the average contract length being agreed now 25 months, but they are seeking to lock in future contracts up to two years ahead of start date to enhance their peace of mind. This is particularly true of smaller companies.

“There is no doubt that the energy sector remains extraordinarily complex, with numerous factors influencing energy pricing and consumption. However, the POWWR Energy Barometer Report proves that progress continues to be made by UK businesses to use less energy and secure longer-term contracts. And this will hold them in good stead, as increasing variability in markets due weather changes and geopolitical instability will inevitably affect prices,” adds Tormollen.

Summary of key findings

• UK business’ average spend on electricity has increased this quarter by 12.6% (from £4584 to £5160)
• Companies in the North East of England pay the least (£4300) for their energy, but those in North Wales continue to pay the most (£6761)
• This is directly linked to energy usage, with businesses in North Wales using 47.6% more energy than those in the North East of England
• Energy usage throughout the UK continues to decline however, with the average UK business now consuming 23 MwH of energy a year, 12.3% less than last year
• The average energy contract length continues to be 25 months, with very little variation between regions
• Smaller companies are often keener to lock in their energy costs than larger companies (25 months versus 23 months)

To access the full POWWR Quarterly Energy Barometer Report please click here.

About POWWR

POWWR is a cloud-based software provider for the energy and utilities sector. Its advanced platforms and simple solutions help over 65 energy suppliers and more than 1,400 brokers across the United States and the United Kingdom win more deals, manage risk, and grow their businesses. The company was previously known as UD Group in the United Kingdom. For more information on POWWR, please visit https://www.powwr.com/ or contact Jo Forsdike at jo.forsdike@powwr.com.