Energy suppliers make hay while the snow falls

The snowy weather is costing UK businesses a fortune - unless you're an energy company, that is.

by
Last Updated: 31 Aug 2010

Generally speaking, snow is bad news for businesses. Some staff don’t make it in at all, ‘forced’ to stay at home and take their hyperactive offspring sledging; public transport goes pear-shaped, meaning that anyone who does come in wastes half the day on railway platforms; and the roads are a nightmare, so deliveries get delayed or don’t arrive at all. But if you’re an energy company, snow is very good indeed for business. Analysts reckon Centrica, the UK’s biggest energy supplier, is likely to pocket an £1.5m per day in extra earnings. Still, at least that presumably means we can expect lower bills – doesn’t it…?

The analysts at Cazenove think that Centrica will be the biggest beneficiary of the cold snap, as businesses and homes crank up the heating in an attempt to thaw out. Some estimates suggest that our energy usage could jump 30% this month, pushing our gas and electricity bills up from an average of £47 to over £200. In some respects that’s fair enough: it’s not intrinsically unreasonable for any company to make more money when there’s more demand for its services. But what grates with many people (as the tabloids were quick to point out) is that most energy companies failed to pass on the fall in wholesale gas prices last year. So the argument is that they shouldn’t be making quite as much money as they currently are.

Meanwhile for everyone else, this week’s proving almost as tough as batting against Dale Steyn in Cape Town this morning (apparently one of the great fast bowling spells of our time), minus the glorious blue skies. The latest estimate of the damage comes from insurer RSA, which predicts that the current spell of bad weather could cost UK plc £690m a day through employee absence and delays. And with more Siberian weather forecast for the next few weeks, it reckons the total bill could hit £14.5bn. Just what we need at the moment.

Still, you’ll no doubt be pleased to hear that thanks to our famously Stakhanovite work ethic (eh? - Ed), and our eagerness to bring you your daily dose of lunchtime business-based pleasure, MT has battled its way into the office. So the only damage to our productivity will be listening to England lose the cricket.


In today's bulletin:

Sainsbury surprises by smashing Christmas forecasts
Energy suppliers make hay while the snow falls
Microsoft and Google try to take a bite of Apple
Tomorrow's world: the new era of technology
Psychology at Work: Make your New Year resolutions stick

Tags:
Finance Energy

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