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Energy Prices to Rise as Investment Falls

Chris Hurcombe
by Chris Hurcombe October 10, 2012
Business RO Charges

As so much good news has surrounded the commercial energy industry of late, some bad news was never going to be far behind – and it’s a double blow as leading authorities are predicting a price rise from many leading providers, and investment in clean energy has taken a tumble this quarter.  In a move that will likely have a knock-on effect for business electricity and commercial gas suppliers across the UK,  SSE (Scottish & Southern Energy) has announced that it will be raising it’s tariffs by 9% as of Monday 15th of October.

A move that will effect 5 million electricity clients and 3.4 million gas account holders.  Consumer action groups have already warned cost-weary consumers to be mindful of a knock on effect, with the ubiquitous Martin Lewis of MoneySavingExpert.com likening energy companies to sheep, cautioning, “Where one leads, the rest will follow.

It is likely – but not guaranteed – that price hikes are coming.  People should be taking preventative action.”

Other large energy companies the look likely to raise prices in the UK are German company E.ON. The giant business energy provider is currently sticking to it’s promise of not raising prices in 2012 – however, no decision has been made on what changes could be rolled out come January 2013.

History has repeatedly shown us that the key drivers that push energy prices up will effect all suppliers, and it becomes a domino effect as each supplier takes its turn in trying to hide the blow of increasing domestic energy prices.

As a commercial energy broker, now would be a great time to talk to us about what fixed-rate energy contracts could save you money on your business electricity, water and gas costs, should prices rise.

Low Investement – Energy Prices

Bloomberg New Energy Finance has reported that investment in clean energy has fallen to $56.6 billion dollars in the third quarter of 2012.

This figures is down 20% compared to the same period last year, and could signal bad news for overall green energy picture this calendar year.

Should this trend continue, 2012 will see the first annual decline in investment in renewable technology in 8 years – news that is indicative of a global financial crisis that is dragging out longer than expected.

“Today’s figures suggest that the full-year 2012 figure for investment in clean energy is likely to fall short of last year’s record $280 billion. If so, 2012 would be the first down-year for world investment in the sector for at least eight years,” a statement accompanying the report said.

Whilst many world leaders agree that a renewable energy economy would help drag their countries out of recession, this slow-down is investment is a sign that many are losing faith in a ‘silver bullet’  of green energy being produced.

In the UK, policies have been greeted with uncertainty in England – where the coalition government is considering using nuclear power as a ‘crutch’ for the next two decades – whereas Scotland and Wales both continue to blaze trails with their goals to become energy exporters to the rest of the EU.

The US and China tell similarly contrasting stories; as America has seen it’s year-on-year green energy spending fall a massive 62%, China’s has increased by 6%.

One of the biggest trend-buckers, however, was Brazil. The South American country saw a 24 percent year-on-year increase, as they prepare for a generation-defining decade of hosting the World Cup in 2014 and Olympics in 2016.