How can businesses ride out the energy crisis ahead?

The UK energy crisis is beginning to feel like a runaway train to many businesses around the UK. And with many anticipating their annual bill to double in 2022 it is hard to see how organisations can hit the brakes. But should we be defeatist about the prospects for the year ahead? And is there a light at the end of the tunnel?

First: the bad news. It looks almost certain that short-term energy prices will continue to rise over the course of the year and monthly overheads for businesses will become a greater challenge. With wholesale prices increasing at an eye-watering rate, there is nowhere for suppliers to go other than up in the near future.

While we have spent many months working with our own customers to find the most competitive deals and secure competitive rates that ease some of the market’s volatility, there is no doubt that there are tough times ahead for enterprises across all industries and sectors. While there was substantial media coverage surrounding the domestic energy price cap at the start of February, many organisations had already seen bills increase by as much as 300%.

As Andrew Goodacre, chief executive of the British Independent Retailers’ Association[1], stated recently,

“The focus has been on the cost of living but the cost of running a business is actually rising faster.”

Of course, it isn’t just the retail industry that is suffering at the hands of increasing prices. Hospitality, manufacturing and construction are among the other sectors expected to feel the squeeze over the coming year.

So, what can businesses do?

While there is little that can be done to prevent the increase in wholesale energy prices right now, it is important that organisations don’t simply feel helpless in the face of increasing bills. Consultiv will design a bespoke energy risk management plan for your business, and we can look to utilise a range of energy contract products to best alleviate the increases.

At Consultiv Utilities the first step we take with customers is to negotiate the most competitive rates on the market and ensure that the tariff meets the needs of the business. While no contract in the current climate can be considered “cheap”, it is still vital to remember that not all contracts are made equal.

Secondly, it is important for organisations to audit their energy usage and put steps in place to monitor, manage and reduce energy consumption wherever possible. Of course, making efficiency savings not only keeps energy bills under control but also helps to keep emissions down.

From the installation of low-energy LED lighting to the use of timers and thermostats, there are a number of simple but positive changes that can serve to take the edge off the worst of 2022’s energy increases.

The light at the end of the tunnel

While it would be foolish to suggest that the price of energy will drop back down to pre-pandemic levels at any time soon, it is important to note that the escalation in prices over recent months is still a relatively short-term phenomenon. According to experts, we should strap in for a very tough 12 – 24 months but this does not mean that prices will continue to rise at the same pace for years to come.

Need help with your business energy contracts and consumption? Get in touch with the team at Consultiv Utilities today.