Energy price update

Energy price update 2018 Q4: increases expected for non-commodity costs

Non-commodity costs have increased and are expected to increase further in the next couple of years. So what are they?

The price you pay per kWh of electricity is not just the wholesale price of electricity. In fact the wholesale price of energy only accounts for around 50% of the price you pay for energy. The rest can be attributed to non-commodity costs. These are compulsory third-party costs and include:

  • energy transportation and distribution
  • government taxes and levies which support the development of renewable energy

The main non-commodity costs include charges such as:

  • Distribution Use of System (DUoS)
  • Transmission Network Use of System (TNUoS)
  • Renewable Obligation (RO)
  • Contract for Difference (CfD)
  • Feed in Tariff (FiT)
  • Capacity Market (CM)

We will look at these third-party costs in more detail in early 2019.

Not too long ago, in 2012, these costs only contributed around 25% to your energy costs. But by 2020, they could account for as much as 60% of you energy bill.

 

Perfect Clarity are independent energy brokers and consultants. Our buying power means lower prices from UK gas and electricity companies to save your business money.