The governments policy setting is starting to impact the profitability of some businesses as energy prices continue to increase (almost doubling over less than a decade and outstripping inflation).
So what's driving this?
The graph above shows how the elements of the total energy bill have changed year on year and how they are likely to change going forward.
The graph has been based on a consumption 1,000,000 KWh per annum and equates to an approximate spend of close to £80,000 in 2013.
As can be concluded from the above, the wholesale cost of electricity used to dominate the fully delivered cost of electricity, although that is likely to change as we approach 2020.
The biggest influencer going forward, along with the commodity cost will be the carbon taxes that are imposed by the government.
Supplier margins, distribution charge and transmission charge costs will still contribute to the bill but will not change dramatically.
Although this graph is only indicative, based on the current market position, it is quite clear that energy bills are on the rise and carbon tax laws, which are out of our control are the main reason behind this.
The cost of the commodity is on the increase, however this is under our control and as we are able to dictate when we purchase our wholesale energy, timing is crucial.