Retail businesses could see a potential bill reduction of up to -57% this month compared to if they had to pay expected wholesale energy prices, according to a new analysis following the release of the Energy Bill Relief Scheme. .
Energy Bills Insight, powered by AI and a leader in SAS analytics, analyzed ONS data from more than 1.6 million commercial buildings to understand how much gas and electricity each sector consumes.
Under the new scheme, the retail sector is expected to see an average annual bill per building of £7,730, compared with £21,370 forecast if prices had stayed at expected winter wholesale costs.
As companies bring their first six-month scheme bill forward, SAS compared average commercial energy use and previously expected winter 2022 wholesale pricing to the government’s current non-domestic price cap to understand how aid will affect different sectors.
The government has stated wholesale prices could have risen to £600MWh for electricity and £180MWh for gas this winter. The new scheme has fixed base rate prices of £211 per MWh for electricity and £75 per MWh for gas.
The research highlighted that companies focused on the public sector – health, emergency services and education – will benefit most from the scheme.
While all industries look set to receive bills that are, on average, more than half of what would be expected, the retail sector has seen one of the least potential bill reductions, amid calls for support from high street businesses to help keep product costs low. 🇧🇷
Government data reveals that more than half of UK businesses with 10 or more employees reported rising energy costs as the main reason they are considering raising their prices.
David Ferguson, Risk Management Specialist at SAS UK & Ireland, says: “The energy crisis has dominated the news agenda in recent months and with good reason as consumers and businesses alike are concerned about how to deal with rising costs. It’s understandable that some businesses were – and potentially still are – worried that they could be paying over £100,000 a year more for energy at a time when budgets are already tight.
“In an ever-changing environment, applying AI to achieve energy-saving tactics can help companies see and deliver cost-saving results quickly. Smart meters, for example, could help businesses and homeowners across the UK better understand their real-time energy consumption and lead to more accurate billing.
“Likewise, energy suppliers can use these techniques to run various what-if scenarios and forecast revenues, given variability in bad debts, loss of customers, government support and a volatile economic climate. This type of decision support is vital for CFOs and COOs deciding how to develop and execute strategies to manage the financial and operational components of the business.
“The level of price reductions varies between companies, depending on the type of contract and the circumstances. Our research highlights how much businesses could spend on energy – and the importance of all businesses using technology to reduce unnecessary energy consumption wherever possible.”
For complete research on energy bills scheme, see here🇧🇷