Understanding the current energy...

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Whether you are a resident, business, voluntary, community, faith or social enterprise (VCFSE) organisation the current rise in energy prices is a worry.  This guest post by Norman Taylor from Barnet-based HENOC LTD offers an overview of why energy prices have risen, and give us some top tips to help keep costs down.

Understanding the current market and how to reduce your energy costs by Norman Taylor, HENOC Ltd

To save money in the current energy market we must firstly understand what is driving the costs in order that we may seek ways to reduce our spend.  A number of factors have resulted in energy price hikes, these included but not limited to;

Pandemic: Many businesses and industries were closed during this period and when businesses started trading again consumption naturally started to rise, but energy companies had lost a lot of income during the closure period as they buy/paid in advance and the energy was not used by customers, reduced consumption, reduced energy bills equals reduced income for energy provider.  In addition, the oil markets had over produced a few years ago and had nowhere to store their oil therefore production was reduced and many were giving oil away as long as you could store it, price was negative per barrel so in effect you were paid to take it, but this soon changed when the pandemic started to fade, which has lead to increase demand whilst getting production levels up.

Russia: The president of Russia had decided last year to reduce the flow of Gas and Oil into Europe, this lead to an immediate price increase in wholesale markets, as demand was increasing.  In addition an invasion has now happened and Russia and Ukraine are at War.  This has led to potentially supply and logistics issues coupled with Sanctions from the West and the motive to detach from reliance on Russian Fuel.  All of this and uncertainty has led to competition and supply on demand price increases.  There is not a shortage of supply, but more a price competitive demand, as shortages could occur owing to the logistics of supply not the lack of resource.

Green Agenda: Net Zero change in many cases means upfront costs before the benefit is felt and seen.  This is also the case with the Green Agenda, there are many levies that are applied in this transition and the costs for generators and suppliers of energy in terms of capital equipment, infrastructure, training and staff has increased.  I feel governments will have to rethink how they achieve Net Zero.

Many people say the costs of producing renewable energy has not gone up and is not reliant on fossil fuels so why is renewable so high also.  Well, the simple answer is the UK model for purchasing energy is far outdated and is in need of restructure.  At present the National Grid every half hour procure energy from generators to cover our requirements for a single national price.  Your energy provider then faces a single price for energy regardless of buying renewable energy or non-renewable energy and in many cases renewable energy costs more.  This is because certification and balancing costs, the national price is typically aligned to gas price (as gas used to make electricity) and energy companies then pay more for Green energy.

For sure, a complete overhaul of the market is needed, but change is coming which will see benefits down the road.  CFD, Contract For Difference for renewable generators, this is where energy generators get a set price for generation and if the market price falls below agreed set price level get a subsidy from the government and if above the agreed set price pay the system back the difference.  This year CFDs will see about £1 Billion reduction in energy bills as the current price is way above the set price rate.

So in the future we are likely to see energy costs coming down as the renewable market expands, sanctions potentially get lifted on Venezuela by the USA who start to buy oil via this route, dependence of supplies from volatile markets/Russia reduces together with the need for fossil fuels.  However, I would suggest that higher prices will potentially be around for a couple of years, so what can you do to reduce spiralling energy costs.

Now that you understand the crises and price rises you can look at what you can do, and the simple answer is you cannot control pricing but you can control energy consumption.  Here’s how;

  • If you have a smart meter in your home, download the Hugo Energy App hugoenergyapp.co.uk. App Store or Android.  The App is invaluable in managing your energy costs via consumption and spend.  Whilst a Smart Meter is great, the displays, functionality of display and data given is not very good.  The App enables you to connect your mobile phone directly to your Smart Meter, seeing your costs wherever you are.  The detailed information together with its layout is far better than any Smart Meter Display.  In addition the App also lets you see your costs, CO2 footprint and can help reduce your energy bills, together with your consent only switching service all done via the App.  This will enable you to reduce energy consumption of which is the only real way to cut costs in the current market.  It also works with any Smart Meter and the App is unaffected if you move supplier. So far better to use HUGO than any supplier direct App as if you move supplier with a direct App it will not work with the new supplier, where as HUGO is fully integrated and transferable as is the data it collects. Every Smart Meter in UK homes should be connect to the Hugo Energy App where possible.
  • Do full Laundry loads, fewer but fuller approach will reduce overall spend on washing.
  • Turn down your washing machine temperature, using hot washers with advancement of detergents on the market is not required, so reduce to around 30 degrees or cold wash.
  • Never leave appliances on standby a TV still uses a lot of energy in this mode costing around £35-40 per annum, now times that around the home with appliance on standby. Hive plugs are useful as they connect to an App and a quick press of a button turns everything of, but these costs so simply switch of at the socket and remove plugs where possible will save you money.
  • Don’t boil the kettle full if making 1 or 2 cups, its costs more and if you are doing this frequent throughout the day will increase costs.
  • Switching to LED lighting throughout the home will reduce consumption, again upfront costs but well worth it longer term, also Hive Lights again can be turned off remotely.
  • Leaving leads plugged into the wall for phones, laptops, players etc. is a bigger cost than you would think, remove from the socket as soon as your device is charged. Remember leaving a device on charge for longer than necessary will waste energy cost money and damage your device, as the battery life is reduced significantly as a result of over-charging.  Never charge a laptop or phone overnight.
  • Keep your house as warm is possible not just by turning up the heating, you achieve this by retaining heat, things like insulation, but simple things like closing your curtains in the house as dusk falls will help to retain heat again more than you think.
  • Reduce your thermostat down a little, not suggesting we all sit in cold houses, but a slight adjustment to this will reduce costs significantly over the year.
  • For those people and businesses that can afford it being independent from supply, such as Solar Panels, Heat Pumps, Battery Storage, Wind, is an ideal position to be in. Greener energy and completely self sufficient but this is a very long way off for the average home or business.


Always ensure you have expert advice before implementing your Green Energy Projects, not all homes or businesses are suitable for some solutions, such as Heat Pumps will not suit a number of UK properties etc. Always seek professional guidance.

Norman Taylor Director HENOC LTD, www.henoc.co.uk  Mobile: 07388 125207 Office: 020 8050 3935

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