Understanding the Energy Market: Why Now is the Time to Act on Your Renewals

The energy market is beginning to show signs of a shift, with demand rising and storage levels depleting due to underwhelming supply. This trend is likely to continue, impacting prices and creating uncertainty for care providers planning their budgets. If your energy contracts are due to expire before April, now is the time to act.

Why Renew Now?

Current rates reflect a relatively stable market state, but this could change as we head into the winter months. By securing a renewal now, you can benefit from today’s pricing before the market potentially crosses into higher price territory.

The Case for Two-Year Contracts

Two-year energy contracts are particularly appealing right now. They offer budget certainty and are often cheaper than one-year options, especially for gas. Incorporating three-year options into offers is also worth considering to avoid potential volatility and ensure stability during a time when:

• Geo-political factors: Conflicts and negotiations, such as the gas flow through Ukraine and the uncertainty surrounding U.S. LNG projects, continue to impact market dynamics.
• National energy changes: Adjustments to our energy systems could cause further unpredictability.

For example, current rates stand around 21 to 23 p/kWh for electricity and 5 p/kWh for gas—competitive figures that might not last.

Political and Market Uncertainty

The energy market is heavily influenced by global events. For instance:

• A potential shift in U.S. energy policy under Donald Trump could stabilise LNG supplies, potentially reducing volatility in the market.
• Conversely, ongoing geopolitical tensions, such as the situation in Ukraine and Russia's diminishing supply, may drive prices higher.

The jury is still out on how these factors will evolve, but taking proactive steps now ensures you are prepared for any scenario.

Lock In or Take the Risk?

For care providers, the decision to lock in rates or wait comes down to risk tolerance.

• Lock in now: If savings are available or rates are close to what you're currently paying, securing a contract now offers peace of mind and avoids potential increases.
• Take the risk: If your renewal would result in higher costs, it may be worth waiting, though the market is unlikely to drop significantly in the foreseeable future.

Let’s Discuss Your Energy Strategy

At Quality Care Group, as with care home insurance and uncertainties, we’re here to help you navigate these uncertainties too. By reviewing your current bills and exploring the best renewal options, we can ensure your care home remains protected against market fluctuations.

Reach out to me today to discuss your energy needs, assess your risk tolerance, and secure the most advantageous contract for your care home. Together, we’ll create a strategy that provides certainty and stability in these unpredictable times.