As Energy Market Reform (EMR) charges are added to energy bills from April 2015, many businesses may be concerned about rising energy prices.

Ensuring you are aware of Government policies that can affect your energy costs is vital – as is working with an energy partner that will be transparent about the elements built into your energy contracts.

EMR is a Government Programme developed in response to the trilemma facing the UK:

1.    Decarbonising electricity supply

2.    Security of Supply

3.    Minimising the cost of energy to consumers

EMR introduces two key mechanisms to provide incentives for the investment required in our energy infrastructure.

·         Contracts for Difference (CFD) provides long-term price stabilisation to low carbon plant, allowing investment to come forward at a lower cost of capital and therefore at a lower cost to consumers.

·         The Capacity Market provides a regular retainer payment to reliable forms of capacity (both demand and supply side), in return for such capacity being available when the system is tight.

Overall EMR will enable large-scale investment in low-carbon generation capacity in the UK and deliver security of supply, in a cost-effective way.

Paul Garratt, Head of Energy Procurement at energyTEAM said: “Businesses that see a more detailed breakdown of their costs, are often surprised at how much of their bill is attributable to third party charges (also known as TPCs). EMR charges are now another element that will drive up the proportion of third party costs.”

“Unfortunately, businesses have no influence over charges relating to EMR that are prescribed by law. However, all businesses can save money on the majority of third party charges by cutting energy use. It is also important to remember that these third party elements will require particular scrutiny in the negotiation of energy contracts to ensure that they are proportioned appropriately.”

energyTEAM’s latest e-guide provides a short introduction to EMR costs and how they may affect your business energy costs. To download the guide, please visit www.energyteam.co.uk/emrguide