Home Business News Expert firm advises what can businesses do with rising energy prices

Expert firm advises what can businesses do with rising energy prices

by LLB staff reporter
21st Sep 21 10:57 am

The rising trend of non-domestic energy prices is driven by a number of global factors. The outlook ahead for the rest of the year and into the first quarter of 2022 suggests that these prices will continue to rise, according to award-winning business energy consultancy, Northern Gas and Power.

Energy demand is rebounding across the world as economies reopen and people return to the office. Supplies for that demand, however, are not where they should be. Gas stockpiles in Europe are already at the lowest level in more than a decade for this time of year, pushing up the cost of producing electricity.

The tightness in energy supply is likely to persist until the first quarter of 2022, leading businesses around the country to make major decisions quickly on their future energy procurement contracts.

Gas prices in the UK are expected to increase further, amid lower Russian supplies to Europe, a lack of LNG supply in Europe, and low European storage levels.

Organisations that must “renew” contracts within the next 6–12 months can mitigate the short-term record pricing by “cost averaging”. These organisations should secure the longest contract term possible. This will average out any prices they pay by taking advantage of lower market prices further out on the curve.

The government’s own forecast predicts that energy prices will continue to rise over the next decade, meaning that the volatility and record-breaking price rises we are witnessing now will become a common theme.

Businesses need to remain flexible and open to new ideas on how they operate and when and how they consume their energy. This means that businesses on Pass Through or Flexible Contracts will have the flexibility to shift their operational hours minimally by just a few hours to take advantage of lower energy rates and avoid paying peak rates.

Rather than businesses securing energy costs through a Fixed Rate contract, which allows little flexibility, Flexible or Variable Rate contracts may allow them to take advantage of lower energy prices depending on the time of day in which they use their energy.

Cutting wasted energy helps businesses save money and reduce carbon emissions. In order to see exactly where and how business energy is being wasted, it is necessary to see reports of energy usage. An energy management system (EMS) is designed to do just that. The hardware and software technology of an EMS solution allows businesses to visually see through graphs and reports just how much energy their business is using and losing.

One of the easiest ways to reduce energy cost is to optimise the way in which it’s already used. Businesses can become more efficient by reducing energy consumption – switching off lights and charging points, PCs and equipment, or using energy-intensive machinery only when required.

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