Weathering the Storm: Mitigating the impact of energy price hikes for businesses

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I was honoured to host one of the Marketing Derby Spotlight Panels today.  The topic was on Weathering the Storm: Mitigating the impact of energy price hikes for businesses.

We were joined by Robert Buckley, Head of Relationship Development, at Cornwall Insight. The report was the trigger for the session and was flagged to us by one of our Bondholders Richard Robey who contributed to the report.

We were also joined by Graeme Cameron, CEO of Pennine Healthcare an incredible Derby based business manufacturer and distributor of medical devices. Graeme also chairs various committees and groups and it was great to hear about the practical experience!

Finally, we were joined by Business Development Director of Scenariio, Tom Erskine. Scenariio are leading the way in helping put sustainability (and also importantly, wellbeing) at the heart of business strategy. Through various methods including smart building technology and high-quality IT infrastructure.

Based on these findings we know that energy prices are going to double, if not increase by fivefold, and we know that whilst prices are expected to reduce, they’re not expected within this decade to return to pre-2021 levels. You can read more about this here.

Since the report was completed, the Energy Bill Relief Scheme, which takes the pressure off business owners until 31 March, but still means that energy prices will be at least double the 2020 prices.

It was fascinating to hear Graeme, who explained that 80% of their business’ energy consumption is on their manufacturing, and obviously hugely affected as a heavy usage manufacturing business. They used the energy crisis to focus on sustainability. He mentioned that before the energy hikes, it had meant that only recently were they identifying where energy was being used. For the first time, energy prices were becoming a key focus.

We talked about price increases, and Graeme explained how he led a transparent discussion on the affects of the energy on their costs, to help support pricing increases. He also discussed about how sustainability was helping with customers as well.

Germany have adopted technologies spurred by their government to improve on their energy efficiencies and this isn’t something in the UK that has been a key focus for our government. Leading companies such as Scenariio are paving the way in helping both create smart buildings but also helping with retrofitting properties to ensure that they can benefit from energy efficiency, as one part, with team retention and far wider reach for sustainability at the core.

Tom went on to explain that whilst adopting LED lighting resulted in a 40% reduction in energy prices, by adopting power over ethernet lighting will reduce costs by 80%.  Linking in with sensors enabling lighting to switch on only as needed, and also being able to sort out lighting from your phone, rather than forgetting to click a switch.

So key measure that each recommended:

Robert identified that understanding the impact of your energy prices is important, reviewing what contract you have, and what this may look like, going forward.

Some of the measures that Pennine Healthcare have done:

  1. Changed from traditional lighting to LED lighting across our site
  2. Manging transport with back haul options and the consolidating of deliveries
  3. Turning off the lights
  4. Agile working so less time at work consuming energy
  5. Dropped the temperature by 3 degrees and see if we receive any feedback
  6. What can we do to avoid using unnecessary energy?
  7. Communication Campaign around Energy and Sustainability – Mange the Temperature and Turn off Lights. Your Company – Your World
  8. Managing the office space so we can consolidate on fewer floors
  9. Don’t have electronics on standby
  10. Visual meters and share with the company the costs of our electricity
  11. Solar panels installed

Tom further suggested getting an assessment and understanding the data, and looking at how energy is being used in your business. Also look at novel approaches to SMART energy to help reduce costs.

Given I was the accountant, I couldn’t help but to ensure that this data was being projected you’re your financial budgets and forecasts to ensure you know where pinch points are to use the data to help drive key financial decisions.

To consider looking for grants for decarbonising, there is a local D2N2 grant available until the 24 November.

Also if you are struggling consider looking at Ofgem here to get recommendations on agreeing a business energy payment plan and other opportunities.

We ended the session, by focusing on taking this difficult time as a motivation to embrace sustainability and to reduce our reliance on energy to help put sustainability at the core of our businesses.

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