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GUEST BLOG: TOP 10 TRENDS IN THE ENERGY MARKET

Ever-changing prices and trends are commonplace within the energy market, so is it possible for businesses to take full control over what they spend and how they spend it? Below are Businesswise Solutions’ Top 10 ways to keep on top of your energy:

Grid capacity and supply security

For some time now there has been genuine concern that the lights could go out across Britain due to shortage of supply. The National Grid acknowledges this is a very real imminent threat as well presenting a more long term risk around the sustainability and affordability of supply. It recognises too that in the longer-term, demand side management will play an increasingly important role in mitigating this threat, which is reliant on high energy use businesses to come off the grid at peak times; something which is already commonplace among intensive users.

All of this underlines the need to reduce energy consumption and seek out ways of coming off grid.

The importance of time to buy

The wholesale price of energy is largely determined by supply and demand. No supplier or third party intermediary can influence that price on any given day. The trick is to monitor the markets and strike when the time is right. The wider the window that you can provide to your broker the greater the chance of being able to buy at the optimal moment, as is evidenced by our activity in the gas market in the last quarter of 2015 and the first quarter of this year, which has saved our clients millions of pounds.

Oil and gas price trends

Without doubt, the biggest factor driving down recent energy prices has been the excess oil production, which comes through the result of a bitter turf war between the oil powers. The good news for consumers is that they could well be enjoying competitive energy rates for the foreseeable future; the bad news is, this honeymoon period must one day soon come to an end; so consumers are advised to act now and lock in the savings currently available.

The growth of non-energy costs

Non-energy costs are making up an increasing portion of the total costs and now account for as much as 55% of a typical energy bill. New government levies introduced in April 2015 to support the UK’s move to lower carbon generation, the introduction of EMR costs, as well as rising electricity transmission and distribution costs are the cause of this increase, making understanding and forecasting bills even more complex. And, while wholesale prices are at historical lows, overall prices are still likely to increase.

Technologies to support energy usage reduction

Advances in energy information technology enable better management of complex, multi-site energy portfolios. Online management portals allow energy managers to keep a close eye on costs, site by site, as well as to identify opportunities to reduce costs across the board.

In addition, investment in such hard technologies as LED lighting, Voltage Optimisation and Infra-Red Heating offer paybacks in the one to three-year bracket.

Renewables and Micro-Generation

The trend to renewables is clear, and while solar is a player it is only one of many renewable energy technologies that are coming into their own. Natural gas is currently cheap and is considered relatively clean and interest in nuclear is high. Microgeneration has become a new industry buzz word for renewable energy systems, which includes solar, air source, ground source and Biomass energy, all of which are key policies for the DECC as they work towards targets of energy efficiency.

The development of battery storage

While still in its infancy and at costs unjustifiable for the mass business market, battery storage is happening and is set to play a huge part in the future of the energy industry. Not only does battery storage give businesses greater independence from the grid, it also supplies backup power in the event of a grid failure, and is the holy grail of the renewables industry, as it enables storage of surplus energy being generated, which currently goes to waste.

Compensation for Energy Intensive Industries (EIIs)

Energy Intensive Industries could be eligible for up to 20% refund of their energy spend. The Government has put in place Renewables Obligation (RO) and Feed-in-Tariff (FITs) schemes in order to incentivise renewable energy supplied through the National Grid in order to meet its energy efficiency targets. It recognises, however, that in the short to medium term, the resulting increase in retail electricity prices risks reducing the competitiveness of the UK’s most electricity-intensive businesses, when operating in internationally competitive markets. As a result, the Government has committed to providing compensation to negate the impact of this policy for EIIs.

Generator farms and battery farms

Almost a quarter of Britain’s back-up power under one programme for the National Grid is being provided by tiny fossil fuel power stations – some of which have been built on farmland by entrepreneurs. The mini-power stations are brought into play by grid managers when there is a rapid surge in demand for power, for example when large numbers are watching major sporting events such as the World Cup or Wimbledon finals or during major TV events such as the final of Strictly Come Dancing and they are set to increase, with attractive paybacks for farms which host them.

About Businesswise Solutions

Businesswise Solutions is a company committed to driving improvements in procurement and the management of business’ energy assets and portfolio of sites. We constantly strive to drive down costs and consumption and provide an energy management service that caters for large single site users through to customers with hundreds of sites across the UK and Europe.

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