UK gas costs recently reached a record high with wholesale gas at 4.5p/kWh for Winter 2021, compared to just 0.9 p/kWh last year, and corresponding wholesale electricity at over 12p/kWh. Add on to this the non-commodity costs at 8.0p/kWh, CCL and standing charges, and many businesses will suddenly face grid electricity costs of 20p/kWh or more, and gas as much as 5.5-6.0p/kWh.
Forward costs for the next few years are also looking high, so if you haven’t hedged or bought forward then you could see massive increases in costs.
So what can you do about it ?
The best thing you can do to avoid this hike is to reduce consumption. Suddenly energy efficiency measures whose payback was too long previously should be more attractive because of the higher costs of energy. It would be wise to revisit what opportunities you have, and to have your operational energy needs reviewed. Inefficiencies that you have lived with for years such as over-sized steam boilers, inefficient motors, outdated refrigeration, obsolete plant, power correction, lack of VSDs, T5 lighting etc, will be worth addressing.
Additionally, generating your own power on site – “behind the meter” – avoids the non-commodity costs and CCL that go with grid power, and is amongst the cheapest form of power you can now source.
A key question though is where does the money come from for these measures ? If the paybacks are still too long, or cash is already committed to other projects, then you can look for zero capex options where the provider will install the measures without cost to you, and then charge you over time for their use. This is what we do at On-site Energy (www.on-site.energy) for energy intensive manufacturers.
We can conduct a free review of your energy usage and recommend efficiency measures and onsite generation solutions without any commitments from you. At the end, we provide you with our recommendations for both efficiency measures and onsite generation, and options for both capex and zero capex funding.
If this sounds interesting then please get in touch with our CEO, David Kipling at david@on-site.energy or call him on 0151 271 0037.
