Soaring energy prices continue to dominate the headlines. The increasingly prolonged conflict in Ukraine is having a knock-on effect on global prices including oil, gas and power. A new energy strategy is needed to curve these rising costs.
Similarly, a fire at the U.S. Freeport LNG terminal couldn’t have come at a worse time. Now, the UK and Europe are more heavily reliant on LNG imports from the U.S. and elsewhere, with this having been the case even before Russia’s invasion of Ukraine. With Freeport accounting for around 15% of the total U.S. exports, it was enough to cause a knee-jerk reaction in EU and UK markets.
This is in addition to inflation being at a 40 year high within the UK, with the Bank of England hinting that a gradual increase in interest rates will be required to combat the rise. Other factors include the damage from the Covid pandemic and the fallout from brexit. Unsurprisingly, these issues continue to be a cause for concern for businesses across the country.
In a new report, experts at commercial energy broker and utilities consultancy Advantage Utilities have revealed the key strategies and targets businesses can put in place to help manage the soaring energy costs, outside of the traditional energy supply agreement.
Commenting on the report, Andrew Grover, Chief Executive Officer at Advantage Utilities, said, “Timing and/or the way we purchase energy – such as flexible contracts – can help mitigate cost increases; however, a wider, more robust energy strategy, intertwined with a net zero target will likely prove key to controlling long term costs.”
He continues: “The geopolitical climate, as well as the prevailing warm weather of late, are perhaps a timely reminder of the need for Europe and the UK to expedite the implementation of more home-grown renewable, cleaner energy generation such as solar and wind, whilst moving away from the reliance on Russian gas and LNG imports.”
“The cheapest unit of energy is the unit we do not consume. In the current climate it would only take a very small percentage reduction in energy usage to yield healthy financial savings.”
There Are Solutions To Rising Costs
Negative energy crisis reports seem to dominate the news, but Grover is confident businesses can put in place strategies to help mitigate the unprecedented spikes and increases seen over the last 9 months.
Energy technologies are becoming increasingly more affordable, with a variety of funding options available and return on investment times being reduced. Larger scale projects may also qualify for Power Purchase Agreement (PPA) funding which allows organisations to benefit from the technology without any capital outlay, risk or ongoing maintenance responsibility.
Grover states, “Feasibility studies on solar, wind, battery storage, CHP, Voltage Optimisation and more can see which energy technologies could help your business become greener. Starting from desktop audits, various energy management products and services are now an option for more businesses, regardless of your size and level of energy consumption.”
It’s difficult to predict the future course of energy prices amidst the backdrop of the ongoing geopolitical issues and uncertainty, but a robust energy strategy, including the changing way we procure energy, can significantly help mitigate cost increases and effectively control energy expenditure. This is in addition to helping achieve any net zero aspirations.
Additional solutions, guidance and advice on energy management can be found within the latest report by Advantage Utilities.