14 July 2023
5 min read
Please be aware that this is a guide only and you should seek specific advice for your business*
Image provided by Zellar
On 30 March 2023, Zellar joined The Co-operative Bank, The Federation of Small Businesses and Go Get Paid to tackle the increasing cost of doing business at a financial support webinar organised by Greater Manchester Chamber of Commerce.
The panel of experts advised UK businesses on everything from improving cash flow, reducing energy bills and obtaining business grants to creating an effective business plan.
In his section, Reducing energy costs, Mike Chessum, Head of Energy at Zellar, covered:
Here’s what Mike had to say.
The Energy Bill Reduction Scheme (EBRS) which capped wholesale energy prices for businesses has ended and been replaced by the Energy Bill Discount Scheme (EBDS).
Unlike the EBRS, which provided a wholesale price cap at 21.1p/kWh for electric and 7.5p/kWh for gas, the EBDS is a discount scheme on whatever the price of the wholesale market was on the day you signed your electric and gas contracts.
It’s fair to say that for new fixed contracts, the EBDS is currently irrelevant and offers no support as the discount only kicks in if the wholesale market rises above 30.2p/kWh for electric and 10.7p/kWh for gas. Current wholesale energy prices are well below these prices, so the discount will not apply to new contracts.
If you signed a fixed contract after 30 November 2021, the scheme applies if the wholesale market was higher than the numbers above on the day you signed the contract. Again, the support is very limited in these circumstances. For instance, if the wholesale market was at 50p/kWh for electric when you signed the contract, the discount you will get on the wholesale element of the contract is only 1.961p/kWh. For gas, the discount is only 0.0697p/kWh.
The wholesale energy market has softened significantly in the past few months, but prices are still much higher than they were before 2022. It seems that these new price levels are the new normal for energy prices in the UK. And, these prices are wholesale prices only: they do not include standing charges and supplier profit or take suppliers that may have purchased the energy they are selling to customers into account.
For more information about the energy market, read our energy market updates.
If your current energy contract is going to expire in the next six months, it’s worth looking at what prices would be available to you if you renew your contract or switch to another energy provider. At Zellar, we do not charge customers any broker fees, so you can save an average of £600 per fuel if you’re currently using an energy broker to help you with your energy contracts.
The reduction in government subsidies is going to affect a number of businesses in the UK. By taking action to reduce your energy usage now, you could also save money, reduce carbon emissions and become more sustainable, which is where Zellar can help.
Zellar helps businesses to measure, plan, activate, report and share their sustainability journey. Our platform recognises that sustainability and cost savings are inextricably linked.
By joining Zellar and becoming more sustainable, your business could save an average of £4,100 - £15k+ depending on the size of your business and how far you take your sustainability journey.
Zellar’s cost-saving sustainability plans are based on five core pillars:
This strategy is designed to be as commercially viable as possible, so you always choose green technology and investments based upon your business operating with maximum efficiency.
Of course, the goal is always to reduce your emissions and bills to the lowest possible point. This means that the final step for a true sustainability plan is not designed to deliver cost savings, but to offset any remaining emissions which you are not able to reduce. For example, these could be from any remaining gas or oil-fired boilers or due to your travel emissions. Zellar provides offsetting from verified offset projects internationally and in the UK, from sustainable forestry in Uruguay to woodland creation in Yorkshire, to help you balance your emissions.
To help you to get started on your sustainability journey, we are currently offering a 20% discount to the cost of Zellar for Co-operative Bank customers. Sign up here to receive your discount or visit our Zellar page for more information.
*While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by The Co-operative Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. This is merely a guide and each business is unique in its requirements. Specific advice should always be sought in each instance.