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Record breaking energy prices seen in the SME market

Sam Holland Analyst

In Q1 2021 we reported that the average SME electricity contract was priced at 17.95p/kWh (for 1-year acquisition contracts at the PC3-6MWh consumption point). This is the highest value since we started tracking propositions in 2012. We also recorded the fifth-highest figure for 25MWh gas contracts at 3.82p/kWh from our Pricing in the SME Power/Gas reports. In this Chart of the Week we look at the causes behind the price increases. Our research shows that prices increased by 5.7% at the PC3-6MWh consumption point and 10.4% at the 25MWh gas consumption point quarter-on-quarter (detailed in Figure 1). Looking over the last 12 months, both power and gas are up approximately 18% when power stood at 15.22p/kWh and gas at 3.23p/kWh.  The increases this quarter come at a time when day-ahead power prices rose 108.5% to £94.20/MWh between October 2020 and January 2021. Day-ahead gas contracts averaged 60.25p/th, up 57.8% on October 2020 (38.17p/th on average). Following the peaks of Q121, day-ahead wholesale prices for February have averaged 47.13p/th for gas, down 21% on the January average. Power has also seen a 40% reduction to its average to £56.23/MWh. Our next report will assess how these changes have impacted the pricing and structure of propositions in the SME market. For more information about the Pricing in the SME Power/Gas reports please contact s.holland@cornwall-insight.com. You may also be interested in... Blog | Energy suppliers must be ready to demonstrate compliance with new principles Blog | SoLR process sees ...

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