Five Ways UK Businesses Lose Money on Energy Without Realising
Most companies think energy overspend comes from high tariffs. In reality, the biggest money leaks happen quietly, hidden in contracts, billing errors, and missed details. Here are the top five silent drains on business energy budgets — and how to plug them.
When your energy budget runs into the millions, a 1% leakage may not stand out. But 1% of £2 million is £20,000, enough to fund another staff member, a new vehicle, or a tech upgrade. And in most cases, leakage is much higher than 1%. Below are the five most common ways businesses lose money on energy without even realising it.
1. Auto-renewals and rollover contracts
Suppliers know busy facilities managers and finance directors are overloaded. That’s why rollover clauses exist: if you miss a renewal window, your contract automatically continues at higher, less favourable rates. One missed renewal can cost six figures over a contract term.
Action: Centralise all contract dates and set alerts. If you manage multiple sites, this isn’t optional, it’s survival. See our How It Works page for how we automate tracking.
2. Misapplied standing charges
Standing charges seem small, only a few pounds per day. But across dozens of meters, errors multiply. A misapplied standing charge of £1.50/day across 40 meters = £21,900 in leakage per year. Most finance teams never notice because the charge is embedded deep in billing lines.
Action: Audit bills line-by-line. Even better, benchmark against what’s typical for your usage profile. Our full guide on leakage explains why this step is critical.
3. Incorrect pass-through costs
Network charges, levies, and other “pass-through” costs are legitimate but they’re often billed incorrectly. We’ve seen cases where Transmission Use of System (TNUoS) was double-counted, or where Climate Change Levy (CCL) was charged to an exempt business.
Action: Use an independent benchmark, not the supplier’s word. Many errors only emerge when you compare across contracts and suppliers.
4. Data gaps and estimated bills
Estimated bills are meant to be temporary. In practice, they can persist for months. Multiply that by 20 sites, and the “true-up” bill at year-end blows budgets wide open. Worse, estimated data hides overbilling and makes reconciliation nearly impossible.
The upcoming Market-wide Half-Hourly Settlement (MHHS) programme will reduce reliance on estimates, but until then, businesses must treat estimated bills as a red flag for leakage.
Action: Insist on regular meter reads and chase missing data. One missing month may seem minor but over time, it’s where leakage thrives.
5. Overlapping supply contracts
When one supplier contract ends and another begins, you’d expect a clean handover. In reality, overlaps happen meaning you’re billed by two suppliers for the same period. These errors are notoriously difficult to unwind, and many businesses pay them without noticing.
Action: Cross-check final bills against new supplier start dates. If you don’t, you may pay twice for the same kilowatt-hour.
The bigger picture: why leakage persists
Leakage persists because finance and facilities managers are overloaded. Energy is one line item among hundreds. Suppliers know this and contracts, tariffs, and bills are designed for complexity. Without systematic oversight, leakage becomes inevitable.
The result? Businesses assume they’re controlling energy costs when, in fact, margins are being quietly drained year after year.
How much is leakage costing your business?
If your business spends between £500k-£5M annually on energy, the hidden leakage could easily be 3–7% of spend. That’s £15,000–£350,000 leaking directly out of your operating margin. Imagine explaining that to your board or worse, not being able to explain it because you never saw it.
Turning awareness into action
- Audit contracts for rollover clauses.
- Check standing charges against benchmarks.
- Verify pass-through costs independently.
- Eliminate estimated bills wherever possible.
- Scrutinise contract start and end dates for overlaps.
What’s next?
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