The cost of the energy that is delivered to your business and your home is made up on many parts .I thought you may find it interesting to understand the cost build up of the delivered energy.
I will explain in a later post which companies are involved in generating, supplying and delivering energy to your business or home.
As pictures are supposed to help spread information, please view the make up of the cost of energy delivered to your meter.
Slicing The pie [based on 2016. Compiled by Noveus Energy]
The largest slice is around 48%. This is the wholesale cost as you might have deduced. And this is the only truly competitive bit. The other 52% is non competitive.
These elements are partially regulated and approved by the the regulator Ofgem. In the pie chart, the Supplier’s profit, risk and margin is 1.9%.
Climate Change levy is 6% [item 8] , the power network costs are around 20% [items 2 and 3 added together]. One of the non energy largest cost is renewable obligation charge at 16%. [item 6]. You maybe surprised to learn that business energy bills contain part of the cost of the feed in tariff that domestic users enjoy.
By 2020 power costs will only be around 35% of the total. Actually being able to use the power results in another 65%
So what must you do next? Firstly you have to keep sorting out contracts. You will find that it is easier, less hassle [and is free] to use Systematic Energy.
However think about the hit in 2020. That is only one more contract renewal away.
Buying the energy at best price only affects 35% of the bill. And the price is going to be higher than now. Using less, finding waste and stopping it will be the major way to cut your costs and increase your profits.