Inenco says businesses may be paying 50% more in 2020 for power than they were in 2016.
The third party intermediary (TPI) has published a new cost forecast that illustrates how rising non-commodity costs and wholesale markets are driving up prices.
Over the last two years, non-commodity costs, which make up around half of business bills, have increased 25%, says the firm. Meanwhile wholesale prices have risen sharply this year with volatility also returning to the market.
The firm warns the impact of Brexit on Sterling could compound price rises while a rise in the Climate Change Levy in April also adds cost.
Changes to the Energy Intensive Industries threshold, which will reduce exposure to policy costs for more big businesses, could mean those levies are smeared across the rest of the market – adding another incremental increase to business bills.
Inenco’s cost forecast also looks further out to try and gauge how prices may rise in the longer term. It suggests bills may double by 2032.
While that presents an ongoing procurement challenge for those on tight budgets, the firm said the flip side is that rising costs could help build business cases for energy efficiency and demand-side management initiatives.
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