New non-commodity charges are going to cause a substantial increase to club’s energy bills. With the increase of non-commodity charges, the fluctuations in wholesale prices are becoming less significant to the overall costs. The non-commodity element of club’s bills is already up to 60%, so with these charges increasing we need to have a clear procurement strategy.

The government are driving efforts to fund the goal of net zero by 2050. The main factors in this will be increased Nuclear and Hydrogen energy production.

The most imminent increase with be the introduction of the Nuclear Regulated Asset Base, RAB. This is going to be a charge to help fund new nuclear project, and is expected to come into play late 2025. With charges expected to increase again in 2026/2027.

With the heavy increase in non-commodity prices, choosing the correct energy plan is imperative. Many suppliers and brokers will offer clubs “FIXED” tariffs, but how fixed are these? Reading into your contracts terms and conditions can be time consuming and feel like walking in quicksand. However, we are here to help. The GMG Energy Club are happy to read through your contract and advise whether you need to be prepared for mid contract increases.

In recent weeks we have seen cases of misleading pricing, resulting in clubs choosing a different broker than the Energy Club to manage their procurement. Brokers telling clients their offers are fully fixed, but the terms and conditions say differently. A club agreed a deal with a supplier last week with the below term:

Your charges reflect both commodity costs and non-commodity costs. Your commodity costs are fixed for the duration of the fixed term period and each fixed price period, but we may adjust your charges to reflect changes in the non-commodity costs at any time. We will give you as much notice as we can of any such change, but we may not be able to do so if we have not been given advance notice of the change.

The prices from the other broker initially did look more competitive, however, with the above term they certainly were not. The above gives the supplier free scope to increase their prices at anytime with no get out clause.

With the above charges coming in and the market potentially rising as the winter demand increases, we are keen to secure clubs on a fully fixed tariff as soon as possible.

We are already securing contracts starting in the next 18 months, with club’s priority being budget security.

If you would like any further information on the above or wish to explore renewal options please contact us on 0161 870 3443  [email protected]

 We look forward to supporting you in navigating these changes.