Domestic fuel bills are making headlines but the situation is even more critical for commercial property owners and landlords. Bolton Birch has had an active management policy on fuel bills and energy issues for some time now ahead of the headline-grabbing fuel cost increases, this is even more critical now.
Summarising why prices are so high now:
- In 2020/21 the UK experienced a cold winter which reduced the amount of gas in storage, never fully refilled through 2021, leaving stocks low as winter 21/22 hit.
- Throughout 2021, we saw increased demand from Asia which diverted LNG gas shipments there, leaving the UK short.
- We also started to see abnormal demand increase from pre-pandemic levels, which again put further pressure on supply.
- The long-awaited new Nord Stream 2 pipeline from Russia to Germany was delayed leaving Europe short of gas.
- Our overall need for power and energy is increasing whilst alternative energy sources try to keep up and replace fossil fuels, coal and gas.
- The current conflict between Russia and Ukraine has driven prices to record highs.
Goldman Sachs is warning that gas prices could stay high until 2025 whilst Centrica and others are forecasting that natural gas prices will remain high for two years and are calling for government support to help with a 50% rise in heating bills.
Chris O’Shea, chief executive of Centrica, told the BBC; “High gas prices will be here for the next 18 months to two years. As the world moved away from coal-fired power stations, there was not an abundance of natural gas to turn on quickly.”
He is calling for the government to help with these price increases; “5% Value Added Tax on energy could be removed from energy and green levies could be removed from bills and could be enacted very quickly, without regret.” But until this happens actions can be taken.
Martin Dodd, Director at Bolton Birch added;
“Bolton Birch’s active energy management policies extend from working proactively with our energy consultant and suppliers to drive the costs down which benefits occupiers and in turn our landlord clients. We conduct regular reviews of renewable energy suppliers and have energy consumption reduction programmes. This includes advice on sensors, sub-meters and LED lighting, and tariff switch reviews and management. In some circumstances, where the building is vacant, we recommend having the meters taken out to avoid excessive standing charges
“It’s about taking a proactive approach to working with proven energy consultants to do the “right thing” on behalf of landlords & tenants. And remember there is not the same protection for businesses as consumers on energy deals, as Money Saving Expert will testify. We ensure we are always looking at contracts and renegotiating the best deals to ensure costs are minimised. Now is the time to consider your energy actions if you are a landlord or tenant of a commercial building.”