When businesses review their energy costs, the first thing they tend to look at is the unit rate.
But focusing on pence per kWh alone can mean overlooking another significant part of the bill:
Standing charges
For energy-intensive businesses, including those operating across the metals recycling sector, these fixed
daily costs can quickly add up to thousands of pounds each year, and in some cases, there may be opportunities to reduce them.
What is a standing charge?
A standing charge is the fixed amount you pay each day for your energy supply, regardless of how much electricity or gas you actually use. It contributes towards various costs associated with maintaining and supplying energy to your site. While a few pounds per day might not immediately look significant, multiply that across 365 days and potentially across several meters or sites – and the numbers can become substantial.
For example, a standing charge of:
£10 per day = £3,650 per year
£25 per day = £9,125 per year
£50 per day = £18,250 per year
£100 per day = £36,500 per year
And that's before you've used a single unit of energy.
Why businesses often overlook standing charges
When comparing energy contracts, it's easy to be drawn towards the supplier offering the lowest headline
unit rate.
But the cheapest unit rate doesn't necessarily mean the cheapest overall contract.
One supplier may offer a lower p/kWh rate but apply a considerably higher standing charge. Depending on your consumption profile, the supposedly cheaper contract could actually cost more over its lifetime.
That's why businesses should assess the total cost of the contract, rather than looking at one number in isolation.
Could you be paying too much?
Standing charges can vary significantly depending on the contract, supplier, meter and characteristics of the site. For businesses with multiple locations or meters, the issue becomes even more important. A relatively small difference on one meter might not appear significant. Replicate it across an entire portfolio, however, and it can become a major annual cost.
We've seen first-hand how reviewing the wider structure of an energy contract, rather than simply concentrating on the headline unit rate, can uncover significant opportunities for savings. Your energy bill contains more than an energy price Standing charges are also just one part of the picture. Businesses can face a range of charges and costs that aren't immediately obvious when looking at the headline energy rate.
That's why understanding exactly what you're paying, why you're paying it and whether it's appropriate for your business is so important.
At Enexus Energy, we don't believe businesses should simply accept their energy bills at face value. Our team can review contracts, invoices, standing charges, consumption and the wider cost structure to identify potential inefficiencies and opportunities for improvement.
Complimentary energy review for BMRA members
As an energy partner of the British Metals Recycling Association, Enexus Energy can provide BMRA members with a complimentary review of their current energy position.
We'll take a closer look at your existing arrangements, including standing charges, unit rates and wider energy costs, to establish whether you're paying more than you need to.
Even if you're already in contract, it can still be worth understanding your current position and identifying opportunities ahead of your next renewal.
When did you last check what your standing charges are actually costing your business?
If the answer is "I'm not sure", now could be a good time to find out. Speak to the Enexus Energy team to arrange your complimentary energy review.
Contact your dedicated BMRA Energy Expert, Jon Howorth:
01253 966961
[email protected]