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The term “the Big 6” is often used in the media regarding the major suppliers of electricity and gas. These six companies were the incumbent supplier (or bought or merged with the incumbent supplier) to customers in different regions across the UK when competition to supply homes and businesses first occurred in varying stages between 1994 and 1998. Despite the entry into the market of new suppliers, generally known as “independent suppliers”, members of the “Big 6” have retained substantial market share.
A smart meter is a high tech metering device that replaces your existing gas and electricity meters. It measures and record the amount you are using of each fuel type, and transmits this information directly to your gas and electricity suppliers. Most smart meters use your Wi-Fi, or a built in SIM card to transfer your data to your supplier or network. The government is rolling out the provision of smart meters to all businesses across the UK over the next 8 – 10 years. The main benefits of a smart meter are no more estimated bills, meter reads sent directly to your supplier reducing the chance of over or underpaying when it’s time to pay the bill. Smart meters are also provide to reduce energy consumption helping reduce costs further and also helping reduce your carbon footprint. If you take the time to consider the information that is being collected by your smart meter, you may be able to reduce your overall energy consumption by changing habits and understanding where energy is wasted.
What is CCL?
The Climate Change Levy (CCL) is an environmental energy tax which was introduced in the UK in April 2001. It is charged on the business use of energy and is designed to encourage businesses to become more energy efficient and thereby reduce greenhouse gas emissions. By working with you to improve energy efficiency, we can help reduce the impact of the CCL on your bottom line. CCL is not charged to the following:
When your business energy contract is due to end, you need to cancel it within a set time period or your energy supplier can automatically sign you up to a new contract. This is what is called an automatic renewal contract. The contract you’re rolled over to will not be good value for money or a competitive tariff, and you’ll be stuck with it for at least one year. Rollover might seem unfair, but it isn’t against the law and it doesn’t break any rules.
As of 2014 Ofgem have obligated business energy suppliers to provide contract end dates on all customer invoices. All suppliers should therefore be doing this. Some suppliers have taken things a step further and not only publish contract end dates but also provide the date by which you will need to terminate your contract if you are to have freedom of movement at contract end. Your contract end date is a crucial piece of information that ensures your next contract can commence smoothly and without interruption. Your termination date is critical in that serving termination notice in a timely manner will afford you freedom to choose your next contract and/or supplier when and how you need to serve termination varies between each supplier, feel free to call for advice.
Your termination date is critical in that serving termination notice in a timely manner will afford you freedom to choose your next contract and/or supplier when and how you need to serve termination varies between each supplier, feel free to call for advice.
This is the amount of electricity that your business uses over a 12-month period, usually displayed in KWh. Energy suppliers use these figures to estimate future use. Consumption is critical in determining accurate pricing so it is essential this is accurate as possible.
Annual Quantity (AQ) is the amount of gas your business uses over a 12 month period. Consumption is critical in determining accurate pricing so it is essential this is accurate as possible.
A ‘suppliy number’ or ‘S number’, is a unique 21-digit number relating to the exact electricity meter at your property. This works like a unique fingerprint which helps to identify your exact meter location and the type of meter you have. This information is essential to ensure you are given accurate quotations.
This is a unique 10-13 digit reference number identifying the gas meter at your property. You should find it on your gas bill.
A kilowatt hour (KWh) is a unit of electricity or gas. One kilowatt is equal to 1,000 watts, so, for example, a heater rated at 1,000 watts left on for one hour will use one kilowatt hour (KWh) of energy. Therefore, a 40-watt light bulb operating for 25 hours will also use one KWh. Prices per KWh vary across the UK.
The Standing Charge is a daily fixed fee charged by energy companies for the costs associated with meter maintenance and the physical process of getting electricity or gas to your property. The Standing Charge is payable even if no energy has been used. Ofgem recently made it compulsory for all suppliers to include a Standing Charge, although this can be fixed at zero on certain tariffs.
Site is the geographic location at which electricity or gas is consumed by the customer. There may be one or more meters on one particular site, which measure the volume of energy used.
The Unit Price Rate is the amount charged for each unit of electricity or gas that you have used during the bill period. This is always expressed as pence per kilowatt-hour (p/kWh).
VAT is a Governmental charge for the supply of goods and services. Most businesses must pay 20% VAT on their energy bills, but charities and and some businesses with low energy usage only need to pay 5%.
A ‘pass through’ charge is one that is set by a third party (e.g. the Government), which suppliers pass on to you, sometimes they are included in the unit rate other times they are added on to the end of a bill. It is important you understand what additional charges you will be paying and how before agreeing any new energy contract.
To show we’re meeting our obligation, suppliers have to buy a certain number of Renewables Obligation Certificates (ROCs), issued to accredited renewable generators, and present them to Ofgem. If a supplier doesn’t have enough ROCs, they have to pay into the buy-out fund to cover the cost of the shortfall. The RO level is set by the Department of Energy and Climate Change (DECC) each year, including how many ROCs we need to buy for each MWh we supply. The buy-out price is set by Ofgem and is adjusted in line with the Retail Price Index every year. Together, these two elements make up the RO charge. In the early years, the RO charge was fairly stable and predictable. However newer sources of renewable energy, like generation plant conversions (eg fossil fuel to biomass) and large offshore wind farms, have less predictable capacities and delivery timescales. This makes it harder to forecast how the RO charge will change in future years. Why is the charge increasing? • To help build a sustainable energy future and meet Government climate reduction targets, the UK needs to invest in and support renewable energy generation. • This means the UK is generating more renewable energy than ever before and the RO level is rising. • The RO level was set at 3% for the period 2002/03. For 2014/15, the level is set at 24.4%
The Government launched the Feed-in Tariff (FiT) to encourage homes and businesses to generate their own renewable, low carbon electricity. Most small-scale renewable generation technologies qualify for the scheme, including solar photovoltaic (PV) panels, wind turbines, hydroelectricity, anaerobic digesters and micro combined heat and power (CHP). The scheme pays generators for every kWh of electricity produced and for any electricity exported to the grid, as long as they’re registered with Ofgem by an energy supplier like us. All energy suppliers pay towards the FiT fund, based on their share of the energy supply market. Ofgem administers the scheme with key decisions being made by the Department for Energy and Climate Change (DECC). Why is the charge increasing? • The UK is generating more renewable energy than ever before, especially from solar PV, with the number of installations rising from less than 20,000 to more than 415,000 in recent years. • That means more FiT qualifying electricity is being generated and more FiT payments are being made. • As a result, the amount of money energy suppliers have to pay into the fund has increased. Your FiT cost is based on the energy you use, as well as the published FiT rates, so you could lower the cost by using less electricity