Rising energy prices: how UK businesses can respond to global uncertainty
The Iran conflict is still evolving, and like many global events, it brings a level of uncertainty that is difficult to plan around. While we don’t yet know the outcome, the International Monetary Fund has indicated that all roads lead towards higher energy prices and slower economic growth.
For businesses, that uncertainty can feel particularly challenging when it comes to energy costs. According to one major energy trader, wholesale gas prices have risen by over 90% over the past three months (mainly in the past four weeks) and wholesale power prices are up 37.5%. Even if tensions ease quickly, current expectations suggest that prices are unlikely to return to pre-conflict levels in the near future.
Why UK businesses are vulnerable to rising energy costs – and what you can do
Here in the UK, exposure to these risks is relatively high. The IMF has highlighted that countries such as the UK and Italy remain more vulnerable due to their reliance on gas-fired power, while others with stronger nuclear and renewable capacity are somewhat better protected.
For businesses, that creates a difficult environment – but there are meaningful steps you can take to reduce your exposure and regain control.
1. Identify quick wins to cut energy waste
In our experience, small changes can have a significant impact. Understanding how energy is being used day-to-day often uncovers opportunities to reduce waste without major disruption or cost. Apart from monitoring energy consumption to look for any unexpected patterns of usage or trends, a basic energy survey or out of hours audit can often identify opportunities that might have been overlooked before now. These may highlight inefficiencies that are easy to address and deliver savings almost immediately.
2. Reassess energy efficiency and renewable investment
Rising energy prices have shifted the economics of energy projects. Measures that previously sat on the “longer-term” list – such as efficiency upgrades or renewable installations – can start to deliver returns much sooner. The business case for self-generation makes sense when pitched against volatile global energy markets: this isn’t the first price shock, and it won’t be the last.
For many organisations, this is a natural moment to revisit plans and reassess what now makes sense financially as well as operationally.
Concept can support you with renewable feasibility studies, to help you understand the practical and financial implications of new technologies, before you invest. We are also seeing increased demand for heat decarbonisation studies, as organisations seek to transition away from gas for heating and hot water. We model the optimum route for your business, considering the environmental benefits, versus the financial and practical viability.
A practical approach to managing energy price risk
There’s no one-size-fits-all answer, and it’s important not to rush into decisions.
A considered, phased approach, starting with quick wins and building towards longer-term resilience can make a meaningful difference.
At Concept, we understand that every organisation is facing its own set of challenges right now.
Our role is to provide clear, independent advice and practical support, whether that’s identifying immediate savings or helping you plan for the future. We take a holistic view, working alongside you to find solutions that fit your priorities.
If you’d like to explore your options or simply have an initial conversation, get in touch.
