Electricity pricing is changing quickly across the UK, and care providers could soon feel the financial impact if they do not act. A combination of rising demand, infrastructure limitations and new charging structures is making electricity costs more complex, and potentially more expensive, than ever before. For organisations already managing tight budgets and increasing operational pressures, understanding how electricity pricing now works is becoming essential rather than optional.
This shift is not simply about energy becoming more expensive in general. Instead, the way electricity is generated, transported and charged for is evolving. As a result, when electricity is used is becoming just as important as how much electricity is used.
Why electricity demand is rising
Across the UK, electricity demand is increasing rapidly. This growth is being driven by several major changes in how energy is consumed nationally. Data centres are expanding to support digital services, artificial intelligence technologies require significant computing power, and electric vehicle charging infrastructure continues to grow.
At the same time, the UK’s electricity generation mix is changing. A growing proportion of electricity now comes from renewable sources, particularly wind power. While this is an important step in reducing carbon emissions, it also creates new challenges for the electricity network.
Wind generation often takes place far from major demand centres. Because the National Grid cannot always transport this electricity efficiently to where it is needed, there are times when wind turbines are paid to stop generating power. This can happen even while consumer electricity costs continue to rise, highlighting the complexity of balancing supply, demand and infrastructure capacity.
These structural pressures on the electricity system are one of the key reasons pricing models are changing.
The shift to time-based electricity pricing
To manage pressure on the electricity network, electricity pricing is increasingly linked to when energy is used, not just how much is consumed. This represents an important shift for organisations that rely heavily on electricity throughout the day.
Electricity usage is now commonly divided into three pricing periods:
Red periods
These are peak-demand periods when electricity is most expensive. They often occur between 4pm and 7pm, although timings can vary by location. During these periods, charges can be significantly higher, sometimes up to 9p per kWh more than standard rates.
Amber periods
These periods sit between peak and off-peak pricing. Costs are lower than red periods but still higher than the lowest-rate times.
Green periods
These are the lowest-cost periods for electricity usage. The term “green” refers to pricing level rather than energy source.
This structure reflects the growing need to manage demand on the electricity network at busy times of day. By encouraging organisations to shift non-essential electricity usage away from peak periods, the system aims to reduce strain on infrastructure.
Rising non-commodity charges
Alongside time-based pricing, non-commodity electricity charges are increasing. These charges cover the cost of maintaining and upgrading the electricity network rather than the electricity itself.
Additional costs are also being introduced to fund new nuclear power generation. While these investments are intended to support long-term energy security, they are adding further pressure to electricity bills in the short to medium term.
For care providers, this means electricity costs may rise even if overall consumption remains unchanged.
Why care providers may be particularly affected
Care providers often operate energy-intensive services that must run consistently to support residents and maintain safe, comfortable environments. However, certain activities offer opportunities to reduce exposure to peak electricity pricing.
Two areas where timing of electricity usage can be particularly relevant are:
- In-house laundry services
- Electric vehicle charging
Laundry operations can require significant electricity usage, especially where large volumes of washing and drying are needed daily. Similarly, EV charging can create additional electricity demand depending on when vehicles are charged.
Understanding when electricity is used within an organisation is becoming increasingly important. Even small adjustments to operational timing, where practical, may help reduce exposure to higher-cost red periods.
The importance of reviewing electricity contracts
Electricity contracts are becoming more complex as pricing structures evolve. It is not always possible to determine from an electricity bill alone whether costs are likely to increase in the future.
In today’s market, choosing the right electricity contract requires more than selecting the lowest headline rate. A proper review should include:
- Analysis of electricity consumption data
- Understanding when electricity is used
- Consideration of future energy requirements
- Awareness of how pricing periods may affect costs
Signing the wrong type of contract could prevent an organisation from reducing non-commodity charges for the duration of the agreement. This makes careful review and independent advice particularly valuable.
Care England Energy Tender: supporting providers
The Care England Energy Tender offers a free energy audit designed to help providers navigate the growing complexity of electricity pricing and procurement.
This review helps organisations:
- Understand how electricity is currently being used
- Identify potential opportunities for savings
- Review contract arrangements ahead of renewal
- Secure the most competitive energy price available
By providing clearer insight into electricity contracts and consumption patterns, the audit supports providers in making informed and confident decisions about their electricity strategy.
More information about Care England’s energy support is available here:
https://www.careengland.org.uk/energy/
Considering longer-term energy solutions – Care England Solar Framework
Alongside reviewing contracts and usage patterns, some providers may wish to explore longer-term approaches to managing energy costs.
The Care England Solar Framework offers care providers an opportunity to access cost-effective, low-carbon energy solutions tailored specifically to the sector. This initiative supports both financial sustainability and environmental responsibility by helping organisations explore solar energy options in a structured and supported way.
Further information about the Solar Framework can be found here:
https://www.careengland.org.uk/solar-framework-care-providers/
Taking action now
Electricity costs are unlikely to become simpler in the near future. The combination of rising demand, infrastructure constraints and new charging mechanisms means organisations that actively manage their electricity usage will be better positioned to control costs.
Providers that review how and when electricity is used, understand their pricing periods and seek expert advice now will be in a stronger position to respond to future changes in the energy market.
Even where immediate operational changes are limited, improving visibility of energy usage and contract terms can reduce risk and support better financial planning.
Getting independent advice
For providers unsure about how these changes may affect them, independent guidance is available. A review of an electricity bill or contract can help clarify whether costs are likely to rise and what options may be available.
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