Planning for uncertainty: Is now the time to reforecast your electricity?
11th August 2020
In the light of the changes caused by the COVID-19 pandemic, it’s never too soon to talk to your electricity supplier – especially if you’re on a flexible contract.
Download our whitepaper explaining how the pandemic could affect your Third Party Costs.
Why does forecasting matter?
When taking on a customer for energy supply, suppliers forecast how much power will be consumed. This figure's based on a combination of historic energy consumption and the customer’s best estimate of what they may consume on site.
Accurate forecasts are important to ensure energy demand matches expected supply, ensuring system stability.
Forecast energy consumption is written into supply contracts, though it can be changed if it becomes apparent that actual consumption will vary from the contracted volume. This reforecasting gives a more accurate picture of the expected energy consumption.
Given the depth of the collapse of electricity demand throughout the UK’s lockdown, most organisations are using far less power than was forecast.
So what can your business do to mitigate the risk?
If you have a fixed contract for your business electricity, then you may not be immediately affected by changes that the coronavirus pandemic has brought about in the market. However, you should bear in mind that this unprecedented fall in demand, and the cost incurred by the National Grid, may still feed through to your bills at a later date (if you have a volume tolerance clause in your contract, for example).
If you are a flexible contract customer - depending on your hedging strategy, and your business’s reduction in consumption - your wholesale electricity costs are likely to be affected. You may also see the impact of increased Third Party Costs (TPCs), too.
What if you’re a Haven Power customer?
If you’re a Haven Power customer, you should have already been contacted about reforecasting your energy use.
Customers who reforecast or adjust their contractual volumes may see an impact to their final energy costs due to the impact of Covid-19 on the wholesale energy market.
If you're not a Haven Power customer, you should talk to your Relationship Manager at your electricity or your third party intermediary about your increased risk.
To help you understand the forces that are driving these rising TPCs – and what they might mean for your business – Haven Power has produced a special new report on how the electricity market as it stands today.
Download your copy today.Download your free report now
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