By Tim Ross, Commercial Director at Advantage Utilities (www. advantageutilities.com)
19th January, 2023 – Following the Government announcing the new Energy Bills Discount Scheme to support businesses post-March, energy and sustainability consultancy Advantage Utilities have today provided their thoughts on what lies ahead for commercial energy in 2023.
As the past 18 months have demonstrated, energy markets remain extremely volatile in the UK and abroad. Though predicting the direction of these markets in 2023 remains difficult, evidence has shown that those businesses who take a risk-managed approach to purchasing energy combined with auditing products and services are far more likely to see improved consumption and costs in spite of increasing pressures.
To help businesses best prepare for a turbulent and uncertain year ahead, Tim Ross, Commercial Director at Advantage Utilities, has provided his energy predictions for 2023:
Staying committed to net-zero will prove challenging but is critical
Tim notes that although the Government’s projected budget of £5.5billion, whilst reduced, is by no means insignificant, it shows that staying committed to achieving net-zero is likely to prove challenging for business across the board in the months ahead. 2023 is likely to see a renewed commitment to staying on track and a more widespread use of tried and tested processes such as energy audits.
“It would have been encouraging to have seen the government channel some additional funding into initiatives designed to drive down national grid reliance. This could have included upscaling the initiative of paying organisations to reduce usage during periods of peak demand or low generation, providing discounted energy audits, which are proving invaluable in the current climate, and providing incentives for an array of tried and tested on-site generation and energy efficiency technology. This in turn would help drive down wholesale energy costs, given the decrease in demand, whilst having the additional benefit of helping towards net zero, which it’s important we don’t lose sight of despite the set of challenges we are facing,” he explains.
Smarter strategies for energy optimisation
As energy prices continue to impact businesses across all sectors, many will be keen to explore ways in which they can optimise their energy usage without having to invest heavily in new equipment. Strategies such as voltage optimisation are set to gain further momentum this year, as by matching supply voltage to a business’ electricity supply, this approach can significantly reduce a business’ electrical spend, by between six and twelve percent, with no need for operational changes.
“This has the added benefit of reducing a business’ carbon footprint by reducing the need for grid-sourced energy. In light of the increasing pressures on businesses this year, voltage optimisation can offer some much-needed respite this coming year,” advises Tim.
A renewed interest in onsite generation
The commercial sector will increase its focus towards efficiency this year via more audits, a greater focus on staff behaviour around energy use and by employing energy reduction technology, suggests Tim.
“Onsite generation will be key to reducing costs as energy from the grid remains volatile and expensive. Renewable technologies, especially solar, offer businesses a return on investment often in just one to five years, meaning they are a largely low-cost and effective way to significantly reduce carbon dioxide produced,” he adds.
Cautious trading throughout the year
Whilst wholesale markets remain well above previously accepted ‘norms’, Tim acknowledges that there has mercifully been some downward movement in recent times. However, he predicts that businesses will remain sceptical as to whether any further energy support will be offered in Winter 2023 and so will continue to trade cautiously in order to keep their business operations stable.
“There is no denying that the government is in something of a quandary, given the unprecedented need to provide financial assistance to businesses during a perfect trading storm and to help an ailing economy, whilst not overburdening the taxpayer with costs relating to private enterprises during a cost-of-living crisis. That’s why in the face of continued uncertainty, we remain committed to helping our customers to better understand the commercial energy market. We will be releasing further information on how high energy costs may be mitigated as the year progresses to help them stay ahead of the game,” adds Tim.
