Small and Medium Enterprises (SME) power prices have continued to rise in Q221, reaching the highest level since our records began in Q212, according to the latest research from Cornwall Insight’s Pricing in the SME power market report. Over the past quarter, prices have increased by 5.82% to average at 18.99p/kWh at the PC3 6MWh consumption point.
Prices in the SME gas market also rose this quarter, with three-quarters of suppliers analysed increasing their gas prices at all of our assessed consumption points.
Molly Lloyd, Analyst at Cornwall Insight, said:
“The rise in SME prices correlates with a significant upward trend in wholesale prices which saw wholesale energy costs rising to some of the highest since the Beast from the East in 2018. Day-ahead power prices rose 15.6% in April to average £69.31/MWh.
“Wholesale prices were supported by factors including higher gas prices, unseasonably cold temperatures, and the associated higher demand levels. This has been compounded by higher carbon prices and outages at some fossil and nuclear fuel plants, causing a tighter power-supply margin. This led to all but one supplier increasing their prices this quarter at the PC3-6MWh consumption point.
“Despite SME gas prices rising this quarter, the rises in the gas market have not been as high as in power, with price increases slowing compared to previous quarters. For example, average prices increased by between 1.4% and 5.3% across all assessed consumption points. Yet this is down from an average increase of 10.4% to 14.7% in the first quarter of this year.
“If wholesale prices continue to be buoyant and even increase, SMEs can experience further price rises in both the gas and power markets. Only time will tell, but it is interesting to see how propositions will be affected next quarter.”
About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
