The Love Energy Savings Guide to Business Energy for Large Users
If your business in considered a large company, or if you work in an industry that requires a lot of energy, you’ll be requiring a different kind of energy deal than your smaller business counterparts.
In fact, energy for large users is rather different and much more complex than sorting your domestic or small business gas and electricity contracts, which is why Love Energy Savings are here to help – with our handy guide to commercial energy for large users.
Is my business a large energy user?
If your business consumes large amounts of energy, odds are you’re already aware of this. However, with new regulation coming in which requires those businesses with Maximum Demand Meters (05,06,07 or 08 profile) to be billed half-hourly, it may be that you are one of the 160,000 business affected.
If your business uses over 55,000 kWh of electricity a year, over 200,000 kWh of gas, or if your business is on a 05-08 meter, you will require a more bespoke energy procurement contract.
Similarly, if you have a business which spreads over numerous sites or premises with more than one meter, you’ll also benefit from being treated as a large user as it may be the case that all your meters can be consolidated into one account, managed by one of our energy experts which will take all the hassle out of trying to keep track of all your different contracts.
Does my business have the right type of meter?
As a larger energy user, chances are your business will be on one of the following types of meter:
A half-hourly meter takes automatic meter readings every 30 minutes, sending it directly to your supplier in order to ensure more accurate billing.
As mentioned above, over 160,000 more business will be billed half-hourly because of new regulation which comes into force in April 2017. This may mean that your bills do rise, due to the increased administration costs required to operate a meter of this kind, however, you can rest assured that you’ll only be paying for the energy you’re using. You can read more about the proposed changes here.
If your business operates in multiple locations it may be worth talking to your chosen supplier about multi-site contracts. While this will most likely aid administration it should be noted that suppliers offer different prices in different regions depending on the Distribution Network Operator.
With this in mind, it may be worth shopping around for each of your meters to make sure you’re getting the best deal for each location. With Love Energy Savings, you don’t have to worry about the administrative hassle as your dedicated account manager will keep track of the various contracts for you, reminding you when each one is up for renewal and whether any cheaper offers have become available.
These meters allow the customer to be charged at different rates depending on the time of day.
Two-rate meter - This is sometimes known as an Economy 7 meter and it differentiates between peak and off-peak usage, charging less for the latter. This is ideal for businesses who use energy late at night or businesses that require machinery to run 24 hours a day.
Three-rate meter - This meter takes weekend usage into account, alongside peak and off-peak supply, charging all three at differing rates. If you’re using energy over the weekend this would be the best choice for your business.
What contract types are available to larger users?
There are generally three types of contract available to large energy users:
1) Fixed Contract
A fixed contract usually runs for a term of one to four years and fixes the price of your energy for the duration. This is a favourable option for businesses who want to plan their outgoings and it also protects your business if energy prices rise.
2) Flexible Contact
A flexible contract alters your prices depending on the energy market. This allows you to benefit from any price drops and means you will always be getting the best energy rate at any given time
3) Interruptible Contract
These contracts tend to be cheaper due to the fact that the National Grid and local authorities will be able to shut off your supply during peak demand periods. If you continue to use energy during this period, you will be charged a higher rate.
Large users should also be aware of the following when agreeing a contract:
This is an important consideration for larger business energy users as it can often affect the price you end up paying. Higher periods of consumption can often lead to higher costs. However, if you are using a significant amount of energy it may be the case that your supplier will keep costs low to retain your business’s custom. It’s worth checking the peak demand rates when choosing your next supplier.
Large site peak day demand
This refers to the sum of Supply Offtake Quantity (SOQ) and can also be referred to as the Maximum Daily Quantity (MDQ). This dictates the maximum daily consumption allowed for any one meter. If you exceed your allowance you may be fined.
How can I reduce my bill spend?
1) Switching Your Tariff
The quickest and simplest way to reduce your annual spend is by checking out alternative tariffs that may be cheaper for your business. It may seem like a gargantuan task, especially if you have multiple meters, but with Love Energy Savings it doesn’t have to be a painful process.
We compare the market in seconds, allowing you to focus on running your business while we do all the leg work for you. We’ll liaise with suppliers on your behalf, negotiating a cheaper deal and, not only that, with your permission we will also conduct the switch on your behalf so you can just relax and enjoy the savings.
To find out more about switching your business energy, here is our electricity switching guide and gas switching guide which will hopefully answer any questions you may have about the process.
If you have any further questions or if you are interested in a comparison, please do not hesitate to call our specialist large user helpline on 01204 866241, where one of our energy experts will be more than happy to help.
2) Climate Change Levy (CCL) Exemption
As a large energy user, you are likely to have already heard about the CCL and the government’s commitment to reaching its 2020 climate change targets, but how can it help save you money on your energy bills?
If your business is using more than 33kWh every day, you will be subject to CCL charges however, exemptions and reductions are available. If your energy is consumed by a mineralogical or metallurgical processes you are 100% exempt from paying the CCL.
If not, you may still be eligible for exemption if you sign up to a Climate Change Agreement (CCA) or the CRC Energy Efficiency Scheme (CRC Scheme). Both seek to encourage energy intensive businesses to set their own carbon reduction targets and increase energy efficiency with the incentive of reduced CCL charges.
Furthermore, if you get your energy from renewable sources, select a low carbon supplier or use combined heat and power (CHP), you may also qualify for exemption.
3) Energy Efficiency
Increasing your energy efficiency will not only save you money via CCL exemption, it will also reduce your cost in terms of the amount of energy you use. There are so many ways to become greener and every small change can add up to make a big difference. From switching all your traditional lightbulbs into LEDs, to installing solar panels on your roof – there are numerous ways, means and schemes to assist your business in reducing that usage.
Ensuring that all your machinery is in good working order and, in some cases, upgrading it to a more energy efficient model will also be a worthwhile investment in the long run and it is certainly worth some consideration.
In fact, the money you could save from switching to a cheaper energy tariff would probably go some way to replacing that out-of-date equipment.
So, what are you waiting for? Call our specialist large user team today on 01204 866241.