Business energy costs are set to rise again

Article posted

21st Apr 2023

Read time

2-3 min read


Mollie Pinnington

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This year suppliers are expecting third-party charges to rise which could have an impact on business energy bills.

Third-party costs are made up of different charges of electricity contributing to the delivery of energy to premises. This includes network charges related to the network structure's improvement and upkeep. These costs can also include environmental charges from the government and are passed on to business customers.

Business energy bills are made up of different components, the main elements consist of the:

  • Wholesale energy costs
  • Third part costs
  • Additional supplier charges

This year wholesale energy prices have been falling, this has led to consumers being able to sign cheaper energy contracts. Unfortunately, these contracts could start to get more expensive as the third-party charges rise.  

The rise in costs has been due to a rise in underlying charges such as the Renewables Obligation, Balancing costs, and Distribution costs.  As well as this the rapid increase of the wholesale market prices and market volatility pushing up inflation last year, has all led to the increase in how much suppliers have to charge consumers for their energy.

When suppliers and the national grid must pay more for things such as balancing payments or environmental duties, these costs often get passed on to consumers. Suppliers don’t generally set the cost of third-party charges; these fluctuate just like wholesale energy prices do.

These rising costs are causing challenges for many businesses as they try to balance their budgets with energy costs being so high recently. Many businesses have already said that they cannot survive another year of high energy bills.

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