In the current economic landscape, having a business energy strategy is important for companies of all kinds, shapes and sizes. We break down why they are important in today’s economic landscape and outline the key elements businesses should include in their strategy.
The conversation around energy in the UK has dramatically transformed in recent years. Finding the lowest price is no longer the only factor in businesses’ energy strategies. In many cases, it has actually been replaced as the primary concern.
The emerging impacts of climate change on our weather and environment are spurring increasing urgency around carbon emissions reduction. Many larger corporations score carbon footprint reduction as importantly as unit price in tendering documents.
The UK’s increasing renewable generation capacity comes with variable performance, which can result in shortfalls. Coal is well on its way to being eliminated from the UK’s generation mix; however, it is still used as a fallback when capacity is not being met, showing that the reliability of fossil fuels means completely removing them will be a slow and painful process.
Geopolitical tensions and conflicts are having profound effects on wholesale markets due to the large proportion of resources which move through these regions. Energy exporters are using gas supplies as political tools to weaken opposing economies.
Conversely, the UK is an energy importer. This means we do not generate enough energy ourselves to meet the demands of the country. This leaves us particularly vulnerable to wholesale market volatility and is one of the reasons the impacts of the energy price crisis have been so profound here.
Energy security has arguably grown the most in prevalence. Businesses and households alike are having to consider their relationship with grid-supplied energy like never before.
The big winner in the current energy landscape should be renewables. Payback periods are now a fraction of their historic lengths. Power Purchase Agreements (PPAs) present attractive options for businesses to benefit from renewable energy with no up-front investment and for investors to generate long-term gains. However, historic apprehension and insufficient governmental incentives are holding many back from fully embracing a renewable revolution.
Regardless, reducing reliance on grid-sourced energy is undoubtedly a strong strategic goal for businesses due to its positive impacts on price, security and carbon.
This guide outlines the high-level approach businesses should take to creating an energy strategy which will prepare them for the short, medium and long-term future of energy in the UK.
Building a business energy strategy fit for the future
- The three areas of consideration when building a business energy strategy
- How to base your strategy around the classic PDCA model
- How to set relevant energy strategy objectives
- How to present your tactics and action plan
- How to know if your strategy is effective
- When and how to work with experts and partners
