The changing face of industry costs
Why you shouldn't ignore non-commodity costs
Energy non-commodity costs are increasing. In 10 years they have gone from 30% of your total monthly spend to nearly 70%. They can no longer be ignored.
What are energy non-commodity costs?
Non-Commodity charges cover everything with the exception of wholesale gas and electricity costs.
They include:
Non-Commodity charges cover everything with the exception of wholesale gas and electricity costs. They include;
- Costs for operating and maintaining the national network – i.e. transporting and distribution gas and electricity.
- Government levies and taxes, aimed at growing renewable generation.
- Supplier Operating costs and margin.
How they have changed
Although these costs have stayed relatively flat for gas, they have increased dramatically for electricity.
10 years ago, non-commodity costs made up just 30% of an average electricity invoice but soon could represent 70% of your total energy bill.
A large proportion of this is down to increases in government levies and taxes.
How non-commodity costs have changed over the last 10 years
In summary, although we have seen a fairly flat, if not falling commodity market (the wholesale cost of electricity), most customers will be experiencing increases in their overall electricity bill driven by the non-commodity costs over the last few years.
The best way to avoid these costs is to use less energy and/or generate your own electricity on site.
This can include effective energy management, efficiency measures and installing actual generation on site, such as solar and CHP (Combined Heat and Power – electricity generated from gas).