How Can Businesses Mitigate Rising Energy Prices?
It is highly unlikely anyone will have avoided seeing the recent news flurry around rising energy prices.
The current global picture is challenging and echoes how interdependent the global utilities sector really is. The ripple effect of a ship stuck in the Suez Canal is still being felt today, six months later.
In our latest piece we cover the potential impact these rising prices could have on businesses. We also look at how businesses can mitigate risks to ensure limited impact to their bottom line.
Rising Energy Prices
Businesses can take measures right now to mitigate rising energy prices, according to Northern Gas and Power’s Head of Energy Strategy, Latif Faiyaz.
He said: “We are experiencing significant turbulence. A quick snapshot of the current situation demonstrates that wholesale prices for gas have surged 250% since January, with a 70% rise since August alone.
“Customers are faced with exponential increases in energy costs. Compared to a one-year fixed deal last year, their energy costs could be up six times what they were.”
What is causing energy prices to rise?
There are several factors. The global economy is remerging from its pandemic lows, so demand for gas is increasing. Europe is also about to start entering winter when gas demand will be highest.
What can businesses do to mitigate rising energy prices?
Against this backdrop though, there are clear measures businesses can put in place.
Businesses can mitigate this price increase by looking at longer term deals. The average unit rate price on a three or five-year deal will be significantly lower than that of a one-year.
Reduce Energy Consumption
Secondly, businesses can identify where their energy is being consumed with energy monitoring systems. These can spot inefficiencies in seconds which can be addressed immediately, making significant savings in the long-run.
Increase Energy Efficiency
Lastly, business can look at energy efficiency improvements. Things such as implementing LED lighting and generating the energy themselves with Solar PV.
As Latif explains: “With solar on their roof for instance, businesses no longer have to purchase that energy and it is 100% renewable. Thus helping their path to net zero.”
Northern Gas and Power works with a myriad of customers, many of which are intensive energy users.
Alex Long is the Maintenance Manager at Klinger UK. The business is a leading developer and manufacturer of sealing products for the oil and gas, petrochemical, utilities, pharmaceuticals and chemical industries.
He explains: “Being able to monitor and manage our energy usage is very powerful. While making decisions on how to run our machines, we see what we need to do to manage that better, and where there is hidden waste as well.
“Energy management is so powerful in helping manage costs and consumption. When you’ve got a good quality amount of data that you can refer to analyse, it allows you to make a much more informed decision.
“There is a massive drive for us as businesses and as customers to reduce our impact and our emissions, and the expectation of us is what are we are doing to reduce our impact.”
Northern Gas and Power has responded to several media enquiries recently around the energy crisis, responding to queries from the Northern Echo and Metro Radio News.