Spiralling energy prices put businesses at risk

11 Sep 2022

The BBC recently reported that tens of thousands of businesses are at risk of going under without government support because of soaring energy bills. On Thursday the new government announced significant financial support for households facing an 80 percent rise in the energy price cap in October. However, many firms, which are not protected by a cap, are currently facing even sharper rises than households and many fixed-rate deals for business expire this October, exposing thousands of firms to full costs that could rise by four or five times or more. 

It will be interesting to see how Governments and businesses respond to the energy crisis over the winter months as energy demand for heating and lighting increase. Germany has already approved measures to limit the heating of public buildings to save energy, as it tries to reduce its dependence on Russian gas. The country will limit heating in public buildings to 19 degrees and radiators in corridors, foyers and entranceways will be turned off. The UK is much less dependent on Russian gas than European countries such as Germany, but still the National Grid has asked five coal powered power stations to be on standby to supply power to the grid over the Winter if supplies become short. 

Along with spiralling energy costs, and the knock-on effect of increasing fuel prices, businesses must also account for the increases to Employer’s National Insurance and the National Minimum Wage, all of which will erode profit margins further. A Help to Green scheme, has been muted, that would enable firms to invest in on site energy production to reduce the dependency on the grid. New PM Liz Truss has pledged to "deliver on the energy crisis” and has so far mentioned the potential for a business price cap for both gas and electricity. While it has been suggested that this cap would apply to Business as well as Domestic supplies, details are lacking and whether this will apply to both SME Businesses and Corporate Energy Buyers is yet unknown. 

There are significant savings to be made by making your building more energy efficient, and numerous options available including, replacing fixed speed drives with variable speed drives, fitting voltage optimisation devices to control and optimise supply voltage, replacing existing belt driven fans with highly efficient direct drive plug fans and upgrading lighting to low energy LEDs to name just a few. Each building is unique and will need bespoke solutions and our experienced building performance engineers are on hand to support you throughout the energy emergency. 

If you would like advice on optimising your HVAC operations or making energy efficiency savings in your building, contact your dedicated Evotech contract manager or our Building Performance Team on 0333 207 4245.