When the National Grid must buy additional energy from generators to support demand, this is called balancing costs. This usually happens because of unexpected weather conditions. Last winter it has been reported that there were unusually high costs in the balancing market as more than £60 million was spent.
The National Grid’s ESO report found that balancing costs have tripled compared to previous years. Bad weather however was not the only contribution to this. The main reason for the high prices was large energy generators changing running time and increasing prices in a short period. This led to the ESO having no choice but to accept many offers at high prices to balance supply and demand.
Ofgem has addressed this issue as the ongoing gas price is putting consumer bills under immense pressure. The cost that it takes for the National Grid to balance the UK’s power system also makes up around 2% of consumers’ electricity bills. Due to this many people are calling out for a change in the system. Many people say Ofgem must close loopholes that are allowing the poor practice to take place.
With the cost-of-living crisis that is going on in the UK, it is unacceptable for energy generators to make extra profits from consumers’ energy bills.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.