Commercial electricity pricing structure
A commercial electricity price is built from wholesale energy costs, network charges specific to the local distribution area, environmental obligation costs, and the supplier's margin, priced against your half-hourly consumption profile where applicable. This differs from a standard small business quote mainly in the level of detail used to price it.
Procurement approaches for commercial buyers
The right procurement approach depends on the business's appetite for price risk, the size of its energy spend, and how actively it wants to monitor the market. Larger commercial consumers with dedicated energy management resource are more likely to use flexible or tranche-based purchasing.
- Fixed price: entire volume locked at a single agreed rate
- Flexible or tranche purchasing: volume bought in stages to manage market risk
- Pass-through contracts: certain cost components tracked and passed through as incurred
Indicative commercial electricity rates
| Consumption profile | Unit rate (p/kWh) | Standing charge (p/day) |
|---|---|---|
| Mid-size commercial site | 20 - 28 | 35 - 60 |
| Large half-hourly site | 17 - 25 | 45 - 90 |
| Multi-site consolidated | 17 - 26 | 40 - 85 |
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Network and non-commodity charges
A meaningful portion of a commercial electricity bill comes from non-commodity costs such as Distribution Use of System charges, Transmission Network Use of System charges and environmental scheme costs. These are largely outside the supplier's control but still vary by region and consumption profile, and they should be reviewed alongside the unit rate.
Managing commercial electricity costs
Beyond the contract rate, commercial sites can manage electricity costs through demand-side measures such as load shifting away from peak network charge periods, on-site generation, and energy efficiency upgrades. These sit alongside, rather than replace, a competitively tendered supply contract.