Average Business Gas and Electricity Consumption

All responsible business owners know the importance of keeping one eye on costs. After all, reducing costs can have a significant positive effect on your bottom line. But to maximise these benefits, you need to understand what it is that you’re paying out for. 

All businesses use energy, whether it’s gas to keep an office warm or electricity to light a yard, but the amount that you use is a cost that you can control. Cutting your usage will save you money and reduce your carbon footprint, but how can you know whether you’re using more than you need to? 

Understanding Average Business Gas and Electricity Consumption

It’s worth remembering that the energy consumption of all businesses will be unique. Some will have high use which they cannot cut, while others might use considerably less but still be able to make further reductions. Many will use more during the day, but some will use more at night. Two businesses which look identical on the surface may have vastly different needs. 

The nature and size of your business matters. Manufacturers and larger businesses will naturally have higher usage. According to a 2019 study by the Office for National Statistics, the three most energy-intensive groups that year were sea and coastal freight water transport, passenger air transport and freight transport by road and removal services. 

Decoding Business Energy Bills: Components and Calculations

Energy bills can look a little daunting to the uninitiated, so here’s a breakdown of everything that you should find on yours. I’ve divided these into two sections, general information and charges: 

General information

The account information on your energy bill includes:

Bill date: The date that you receive your bill.

Bill number: The reference number for your supplier to identify your bill.

VAT number: Your registered VAT number.

Account number: Your overall account identifier.

Contract details: A summary of the details of the contract you have with your supplier.

Billing period: The time period over which you’re being charged for your energy use.

Type of charge: Whether your bill is based on an accurate or estimated usage figure.

MPAN/MPRN: A number used by suppliers to identify the meters on your property.

Charges

These are the charges on your bill, which include:

Billing period charges: The amount you’re being charged overall during the billing period.

Outstanding charges: The amount you owe, if any, from previous bills.

VAT charges: The amount added to your bill for VAT.

Total amount due: The amount you owe after adding up all the above.

Cost breakdown: A breakdown of charges that allows you to see exactly where your money’s going.

The Factors Influencing Business Energy Costs

Some of the factors which  will influence your business energy costs may include:

1. The type of fuel your business uses

How the market affects energy prices and the cost of each type of fuel varies based on changes in demand and availability. The cheaper and more readily available your fuel source, the lower your overall energy costs will be.

2. The type of energy plan your small business has

Your energy contract is one of the factors that influence energy prices for your business. Choosing one that matches your business needs is essential if you wish to get the best value from your contract. 

3. How close your business is to its energy supply

One of the factors affecting electricity prices and a major component of your electricity cost is the transmission fee, which covers the cost of bringing electricity to your place of business.

4. The season or time of year

Demand rises and falls depending on the season, affecting energy prices.

5. The current economic climate

The state of the economy is another one of the factors that influence energy prices. Knowing how the market affects energy prices can help you better anticipate and prepare for changes in energy costs for your business.

6. Extreme weather and natural disasters

Inclement weather or natural disasters can disrupt power generation and transmission.

7. Government action

Government entities affect the price of energy through tax and regulatory policies, such as the Energy Price Cap. 

8. The global energy market

As we have recently seen, supply disruptions can send wholesale prices skyrocketing. The less crude oil or natural gas is imported or produced domestically, the higher the market price.

How Much Energy Should Your Business Be Using?

As we’ve already seen, this question is at least in part down to the size of your business and the specifics of what you do. But this table will give you a rough idea of where you might find yourself in comparison with other businesses of roughly the same size: 

Average Electricity kWh Prices

Average Gas kWh Prices

Prices are correct as of March 2024. Prices may vary and depend on business size, meter type, usage and location.

How to Find the Best Business Energy Prices

Unlike consumer electricity prices, business energy prices are usually negotiable. Contact us at SwitchPal, and we’ll use our panel of trusted partners to find you the best quote possible for your business needs.

Are There Tools or Software to Monitor and Manage Business Energy Consumption?

There’s a variety of tools and software that you can use to monitor and manage your business energy consumption. An energy management system (EnMS), for example, takes a deep dive into existing energy operations and uses smart measurements to identify how your organisation uses energy.

What Industry Sectors Have the Highest and Lowest Average Energy Consumption?

The ONS found that the three most energy-intensive industry sectors are air transport, water transport and electricity, gas, steam and air conditioning, though it may surprise some to find out that basic retailers such as supermarkets and convenience stores represent one of our largest non-domestic consumers of energy. The lowest are education, crop and animal production, hunting and related services, and other personal service activities. Small businesses make up a high proportion of our total number of businesses and there is plenty of space to reduce costs. If you think that you could be paying too much for your gas and electricity, or if you want to reduce your carbon footprint, contact SwitchPal today to find out how you can take your next steps!