Understanding Energy Supply

How Does Energy Supply Work?

Having looked at where our energy comes from in our first post, ‘Understanding Energy Generation, with an overview of the four main sources, Fossil Fuels, Nuclear Power, Gas and Renewables, the next logical step is to look at how it is supplied, from where it starts to where it ends.

Energy begins life with the generator, who sells it on what is known as the Wholesale Market. Once it hits this market it is then up to individual suppliers to trade with one another and look to accumulate the energy to sell on to you.

Domestic

In the Domestic Market energy will come directly from Suppliers into your home. These suppliers will have traded for it on the Wholesale Market before it reaches you. Most properties will be fitted with an electricity and gas meter somewhere within the house, which allows the amount of energy being used to be calculated.

In Domestic markets it is The Big Six who receive the biggest share of the supply, with a massive 95% of the energy we use in our homes coming from one of them. The Big Six consist of the following powerhouses:

British Gas

Scottish Power

npower

E-on

SSE

EDF Energy

The 5% that remains is taken up by smaller, independent companies and, although a small percentage at present, there has been pressure from the government for this share to grow. The more companies offering energy, the more choice a domestic user has, and a better chance of making a saving when switching between suppliers is available.

Commercial

The Commercial Market sees a less clear-cut majority. For shops, factories and businesses across the UK there is far more choice. Initially there is the choice of whether you go directly to the supplier, as domestic users do, or whether you choose to get your energy through an Energy Broker.

Energy Brokers (also known as Energy Consultancies)such as Energycentric, will look to negotiate a deal on your behalf, speaking with the suppliers and reporting back to you. It is this relationship that we thrive on at Energycentric, giving the client complete power but without any of the stress of having to manage their energy supply themselves.

The commercial market is considered a volatile one in a way that the domestic one isn’t. Energy can be bought over many different time spans, either yearly, monthly, weekly, daily or even hourly. This means there is more risk involved, something that an energy broker can help alleviate and manage for you.

So that is a brief Understanding of Energy Supply. For more information, or to find out the part that Energycentric plays in all this, feel free to call us on 01708 765555, or email us with your query.

The last blog in the series will be an overview of ‘The Big Six’; who they are, how they operate and the pros and cons of using them.