Businesses worried about Powercut Britain

This follows recent warnings by OFGEM that the UK generating capacity is nearly at full stretch. With the planned closure of some coal and nuclear power stations, OFGEM is warning that spare capacity could fall from today's 14% level to just 4% in three years, with a risk of ‘brownouts’ and ‘blackouts’ starting in the winter of 2015-16.

This is one of the key findings of a survey published jointly this week by the Major Energy Users’ Council (MEUC) and Power Efficiency, an integrated energy solutions company and part of the Balfour Beatty Group.

The report -‘Powercut Britain – Are the lights going out for UK business?’– contains the findings of a survey carried out over the summer of 2013 canvassing the opinions and concerns of major commercial and public sector energy users in the UK today. The combined energy spend of the 129 participating companies, which included 10% of the FTSE 100, is approximately £1 billion per annum.

Other key findings of the report are:

·       Initiating ‘behavioural change programmes’ (60%), investing in renewable energy sources (50%) and installing onsite generation (43%) are the top three major actions businesses are currently taking to protect security of supply in the future.

·       The Carbon Price Floor, introduced this year at £16 per tonne of carbon emissions, is a cost which 35% of businesses say will need to be passed on to their customers by increasing the prices of their products and services. Nearly half of the businesses polled (42%) say it is a cost which will impact on profitability and one the business will need to absorb for the time being.

·       Over 90% of UK businesses think that energy inflation poses a major threat to UK competitiveness.

·       Three quarters (74%) of UK business are aware of their obligations to report greenhouse emissions in their Directors’ Report as of September this year and of EU regulations which will compel energy surveys by 2015. Conversely, one in five businesses (21%) are unaware of these obligations. Nearly half (48%) have already taken steps to comply with these obligations whilst a third (33%) say they have not taken any actions.

·       Nearly two thirds (62%) of UK businesses say they have a clearly defined energy and carbon reduction strategy, but a third (33%) say they do not have such a strategy in place.

·       Nearly two thirds of UK businesses polled (60%) say they have plans in place to make a substantial investment in energy efficiency. A third (32%) say they are considering financing an energy efficiency programme through an Energy Performance Contract (EPC) or from an Energy Services Company (ESCo).

Commenting on the publication of the report, Andrew Bainbridge, chairman of the MEUC, said: “It is clear that big businesses are becoming increasingly alarmed by the energy perils they face and understand they must stiffen their resolve to actively manage and reduce their costs.” 

Andy Wild, Managing Director at Power Efficiency, added: “This report highlights the complex issues facing business in the UK today and underlines why we believe the issue of energy management is moving ‘out of the plant room and into the boardroom’. It provides a compelling insight into why managing energy costs and securing security of supply will dominate the agenda of UK businesses wishing to remain competitive in the coming decade.”

Copies of the report can be downloaded from www.powerefficiency.co.uk