Navigating the challenges of post-lockdown energy deals for UK businesses. Learn how to minimize the costs and maximize your savings.
The UK has been through nationwide lockdown three times, and it has certainly affected the business sector as they were only allowed to operate with 50% workforce capacity. Over the past few days, the government recently started to chalk out plans to ease the restrictions. Now, it seems that the businesses are doing well. However, they might have to face some challenges from their energy suppliers.
The reason is that, with every market down, energy suppliers also suffered during the crisis. So, the business community will have to face costly repercussions. Below are the few challenges faced by the business entities when they encounter energy businesses post-lockdown:
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Revised Contracts with More Stringent Clauses
Businesses in the UK were allowed to work with 50% operating capacity or shut down completely. Ever since things got unexpectedly halted due to the COVID-19 pandemic, the previous contracts had no such clauses to cover the losses incurred by energy suppliers. This is because nobody had anticipated this crisis and emergency before it happened.
Therefore, it has caused irreparable damage to the energy suppliers throughout the UK. All energy suppliers have suffered from slowed-down business entities, whether it may be gas or electric energy suppliers.
When the lockdown ceases gradually, the first thing business energy suppliers will do is renew their contracts with the business. They may add strict clauses if the government imposes any lockdown if the cases surge once more. This may cast a 4th wave of COVID-19.
Either the energy suppliers will update the previous contracts with the new rules or offer new contracts post-lockdown to ensure they don't incur damages due to any worldwide emergency or disaster-like situation. Since businesses want to operate at full capacity, they have to abide by the terms and conditions proposed by energy suppliers.
Fluctuation In Rates by Energy Suppliers
This is the factor that energy suppliers can control. Energy supplier businesses may start changing the rates and increasing them to cope with the damages they have suffered during the lockdown period. Therefore, it will come as a shockwave for the businesses opening with a low start as the lockdown is about to ease up.
To compensate for the differences, the energy suppliers will draw their losses from businesses. This, in turn, will get the loss recovery by charging the consumers. So, in this cycle, businesses are at the center, and energy suppliers are at the top for initiating this change in rates post-lockdown.
Thus, businesses will be the ones who will bear the brunt most. You can take a look at any utility bidder online to compare the prices after the lockdown eases, and you will find a sudden increase in utility prices.
Energy Usage Penalization
Keeping in view the reduced working capacity, the energy utilized by businesses is also reduced. This, in turn, is causing adverse impacts on the managing charts of energy suppliers. To retaliate, energy suppliers will look for the option of imposing fines before even renewing the contract with businesses post-lockdown.
This can be because they were not fulfilling the average energy usage requirements with their chosen services. This seems absurd, but energy suppliers may go far more than this to cover their side of the business.
The core element to be noted is that no matter when lockdown is taken off, energy suppliers will be at the helm of business energy affairs, and the businesses will have to bear the brunt.
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