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As you may know, the energy market has been incredibly volatile with one broker describing it as "apocalyptic". Over the last few months, we have been working with several energy brokers to try and establish the best price possible on our new electricity contract which ends on the 1st October 2022.
There are several factors combined which have led to astronomical price increases. In 2021, the market was selling electricity at 13.66pkwh. It is now between 90-1.05pkwh - that's a 592% increase! These prices are made up of commodity costs & government levies. Another factor is that in the U.K alone, 47% of our electricity is generated by gas. Gas is supplied from either Nordstream or the North Sea, but since Russia closed off its supply to Europe, those customers have moved from Nordstream to the North Sea pushing up the price even further.
Our original electricity contract was locked in 2019, therefore we have managed to avoid the increases that the market has been suffering since the impact of Covid-19; However, it has sadly caught up with us at the worst possible time.
Our new price pkwh is now 99.85p. With VAT & CCL included, the resale price which will be reflected via the bollards from 1st October 2022 will be £1.21 ppu.
Due to the volatility of the market and the range of future uncertainties, we have taken the decision to sign for 12 months over 3 or 5 years to ensure we are not locked into enormous price per unit costs which are reflective of the market today, but not reflective of the future. We are also hopeful that the government will shortly deliver their plan to help businesses with these increases, savings we will be able to reflect back to our customers. Although we're locked in at 99.98pkwh for the next 12 months. with government assistance we have been advised that the price could be more around the 55pkwh mark.
We know this will come as a shock & disappointment to you all, as it did to us but we are
hopeful that at the end of this 12 month period, prices will once again stabilise and we will be able to re-tender at a much more reasonable price per unit.
We are working with our vending machine payment provider Nayax to increase the transaction limit from £30 to £100 as so we can offer higher value cards without customers having to purchase multiple cards in multiple transactions. We are also working hard to work out ways in which we can reduce or electricity usage. We will update you all at a later date with our energy saving plan for the next 12 months.
We thank you in advance for your understanding whilst we 'batten down the hatches' during what will inevitably be, a very turbulent 12 month period for us all.
*UPDATE* 24/10/22
Due to the change in the government support scheme, we have received an urgent update from our brokers today to advise that the amount of support we were due to receive is significantly lower than originally expected. As a result, we must increase the ppu on the bollards from 55p to 75p. We’re very sorry to be delivering such disappointing news and appreciate the impact this will have on you all however, as we have only locked in for 12 months, 6 of which should be alleviated by the support scheme, we hope to be able to bring prices down to a much more manageable rate by October 2023 when we tender out again to a new supplier.
Thank you all for your patience and understanding.