In Q321, the average small and medium enterprise (SME) gas contract was priced at the highest values since Cornwall Insight records began in 2012 – reaching 4.98p/th for 1-year acquisition contracts that assume a 25MWh annual consumption.
Research from Cornwall Insight’s Pricing in the SME gas and power markets report also shows SME electricity contracts seeing record highs, priced at 19.95p/kWh (for 1-year acquisition contracts at the PC3-6MWh consumption point).
The below graph shows the average prices for SMEs for both gas and electricity and reveals that gas prices increased by 28.4% at the 25MWh consumption point and electricity prices rose 12.5% at the PC3-6MWh when comparing quarter-on-quarter prices.
Molly Lloyd, Senior Analyst at Cornwall Insight, said:
“When comparing Q321 prices with the equivalent contracts offered last year (Q320), we see that the value of PC3-6MWh power contracts has risen by 32.6%, while 25MWh gas contracts have increased by 58.6%. Overall, Cornwall Insight has recorded consecutive increases in the past five quarters up to Q321.
“The continual rise of business contract offerings reflects the significant increase in wholesale prices over the past year with prices reaching record highs. For example, with the UK coming out of a first lockdown in August 2020, day-ahead power prices averaged £38.24/MWh. The same day-ahead contract was priced at an average of £108.82/MWh in August 2021. Gas followed a similar story, with prices rising from 20.12p/th to 110.56p/th over the same period.
“85% of suppliers assessed in our report increased prices across all tracked contract offerings in the electricity and gas markets. With wholesale prices still high, SMEs with energy contract renewals due are likely to be worried about their options.
“Some third-party intermediaries (TPIs) are suggesting short-term contracts of six months. Therefore, allowing SMEs to have the chance to secure a lower price if they fall in the coming months. Whereas others are suggesting longer-term contracts to enable SMEs to spread the cost over a longer time frame.”
Notes to Editors
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