UK energy managers ‘unaware’ of impacts of rising non-commodity costs
More than half of senior UK energy professionals are "unaware or unsure" of the potential impacts which rising non-commodity costs will have on their firm, according to new Government figures.
Released today (18 September), a YouGov survey of 250 senior energy managers revealed that 88% do not have access to a tool that can predict how their energy costs will alter over the next ten years.
According to energy company npower’s consulting arm, this lack of resources has created a “knowledge gap” among the UK’s energy management community.
While two-thirds of respondents said they expected their energy costs to rise over the next decade, only 13% believed costs would increase by more than 40% on current rates, in line with npower Business Solutions’ (nBS) prediction of a 40-45% increase by 2028.
“There is a worrying knowledge gap among energy managers in the UK when it comes to understanding the impact of non-commodity costs, which will hurt businesses if not planned for and managed carefully,” nBS’s director of markers and innovation Mayne Mitchell said.
“Step one is to forecast how these costs will impact an individual business - but this needs to be followed with the implementation of a long-term energy management strategy.”
In order to better prepare energy managers for the anticipated cost hike, nBS has this week launched a free tool that provides bespoke 10-year energy price forecasts to professionals. Called Cost Predictor, the digital tool calculates how a company’s energy costs will rise over the next decade using information such as which sector it operates in, how many sites it has and its current annual consumption.
Once the forecast is complete, the tool also calculates how different energy management practices could alter costs.
The price is not right
The move by nBS comes after a major Government-backed study found that the costs of energy for UK businesses are currently “higher than necessary” due to a lack of streamlined regulation around renewable power procurement and ‘smart’ energy technologies.
The Cost of Energy review, led by economist and academic Professor Dieter Helm, examined how the costs of electricity can be kept as low as possible as the UK looks to achieve security of supply while meeting carbon reduction targets.
Sixty-seven recommendations have been made within the review, including removing 'legacy costs' from key green policy frameworks for Renewables Obligation Certificates (ROCs), feed-in tariffs (FiTs) and Contracts for Difference auctions (CfDs).