According to our latest Pricing in the SME power market report, Small and Medium Enterprises (SME) power prices have continued to rise in Q221, reaching the highest level since our records began in Q212. On average, prices have increased by 24.8% year-on-year at the PC3-6MWh and PC3-15MWh consumption points and 25.4% at the PC4-40MWh consumption point.
In fact, over the past quarter, prices have increased by 5.82% to average at 18.99p/kWh at the PC3 6MWh consumption point. This rise 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, 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.
Prices in the SME gas market also followed suit, rising this quarter with three-quarters of suppliers analysed increasing their gas prices at all of our assessed consumption points. However, 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.
Looking ahead, if wholesale prices continue to be buoyant and even increase, there is a possibility for SMEs to 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.
Further price movements will be detailed in the Q321 edition of the Pricing in the SME power and gas markets reports. The report also includes details on supplier prices, contract lengths, selling windows and credit policy. For further information, please contact Emily Matthews at e.matthews@cornwall-insight.com.