Changes in the markets of Water and Electricity for business

In the previous generation, it could be argued that costs such as water or electricity were often afterthoughts in a business operation. However with the consistent rises in price that have been observed in the past 10 years, this can no longer be the case. Whilst costs like water and electricity are often grouped together, the products have one major difference; water in the UK is generally considered as renewable, whilst our power sources for electricity are not. Currently, most of the energy used in the UK comes from non renewable sources, this goes a long way to explaining the relative price differences for water and electricity.

As fossil fuels become less available, prices for electricity are likely to increase further. Electricity for business is often a major cost, especially for manufacturing firms that tend to have high usage. Water is generally cheaper, this is due to it's renewable nature, and also its low cost of production. Some areas of the world, for example the Middle East, have significantly higher water costs due to the more advanced techniques they require to produce suitable drinking water. Analysts predict that both the costs for water and electricity look set to increase in the future, although the rise in electricity costs are likely to be steeper as developing countries like China and India continue to increase their electricity usage at substantial rates. Water costs are likely to increase too, however this margin is likely to be less steep.