Why energy costs are surging — And what organisations can do about it
Written by Matt Small from T150 Energy
Energy prices continue to dominate conversations across the UK’s business, charity, care and education sectors — and it’s clear why. Rising costs, ongoing instability and an increasingly complex energy landscape are creating significant pressures for organisations of all sizes.
Drawing on recent discussions and day‑to‑day work within the sector, this article outlines the key factors behind the current challenges and the practical steps organisations can take to protect themselves.
1 Global instability is driving UK energy prices up
Although the UK does not face a gas shortage — with consistent supply from Norway and LNG imports from the US — prices have continued to rise. This isn’t because of supply issues, but because global instability is pushing oil markets upward. Tensions involving Iran, along with wider geopolitical disruptions, are contributing to sustained volatility, which then feeds directly into UK energy pricing.
While further dramatic increases seem unlikely in the immediate future, prices also show little sign of falling back to previous levels.
2 Organisations are feeling the pressure
Recent examples from across the sector show how sharply these changes are being felt:
- An early-years provider expecting to break even now faces an £8,000 annual increase in energy costs.
- A charity previously forecasted for a £20,000 rise is now preparing for closer to £35,000 as the market continues to shift.
- Some organisations are unknowingly paying for much higher electrical capacity than they require. One client reduced its KVA allowance and immediately saw its monthly cost drop from £900 to £450.
- Another organisation saved £17,000 per year after correcting a long‑overlooked allowance — a mistake that had persisted for a decade.
These cases highlight a common theme: hidden inefficiencies can drain budgets without anyone realising.
3 VAT errors are more common than expected
One of the most frequent — and costly — issues uncovered during reviews is VAT misclassification.
Charities and care-sector organisations should be paying five per cent VAT, not 20 per cent. Yet around one in seven of these organisations are on the wrong rate, often unknowingly.
In many cases, overpayments can be reclaimed, with refunds reaching tens of thousands of pounds, and the same applies to incorrect Climate Change Levy (CCL) charges.
For organisations under financial pressure, these corrections can make a significant difference.
4 Why forecasting matters more than ever
A consistent message shared with organisations is the importance of full energy analysis and forecasting.
Most businesses — whether engineering firms, charities or care providers — simply don’t have access to real-time market data. This makes it almost impossible for them to forecast future energy costs with any accuracy.
Historically, forecasting hasn’t been widely available through traditional brokers either. As a result, many organisations wait until only a few months before their contract ends to review pricing — often leaving them exposed to sharp, unexpected increases.
Reviewing early and forecasting proactively is now essential, not optional.
5 Long-term investment will keep prices higher
The UK has committed £28 billion to improving its energy infrastructure — a necessary move, but one that comes with long-term cost implications.
Even without fresh geopolitical shocks, this level of investment means energy prices are unlikely to fall significantly in the coming years. Organisations need to plan with this reality in mind.
How T150 Energy supports organisations differently
At T150 Energy, the work goes far beyond sourcing new contracts. The focus includes:
- Analysing existing energy costs
- Forecasting future scenarios
- Identifying hidden inefficiencies such as VAT errors or incorrect KVA allowances
- Reviewing gas, electricity, water and waste contracts
The payback scheme
Launched in 2024, the Payback Scheme returns a portion of T150 Energy’s commission directly to organisations in the care, education and charity sectors.
This initiative was inspired by a personal experience — a diagnosis of a colloid cyst in 2020 that brought a six‑month prognosis and a reminder of the support provided by the NHS and charity sector. Giving back became a core part of the company’s mission.
The impact scheme
For organisations outside these sectors, T150 makes a donation to a charity chosen by the client, helping strengthen their social impact and CSR contribution.
What firms should do now
To protect themselves from further volatility, organisations should:
- Review energy costs early - Late reviews can expose organisations to sudden, budget‑breaking increases.
- Request a comprehensive analysis and forecast - Understanding current costs and future projections is now essential.
- Check VAT classifications and billing accuracy - These small details often unlock major savings.
Conclusion
The factors influencing UK energy prices — from geopolitics to infrastructure investment — are complex and largely outside any single organisation’s control. What is controllable is preparedness.
Accurate forecasting, detailed analysis and proactive reviews now form the foundation of responsible financial planning. Organisations that take these steps early can protect themselves from the most severe impacts of market volatility.