The impact of the energy crisis has meant that businesses of all kinds have felt its effects, albeit to differing extents. Although no business has been exempt from price increases during the crisis, factors such as sector, size and geography all have a role to play in the amount that certain businesses will be paying for the foreseeable.
Below, we’ll take a look at the businesses and industries that have been hardest hit by the energy crisis, the knock-on effects that could occur as a result of these impacts, and how companies can mitigate the most-damaging consequences.
A recent study analysing the impact of soaring energy prices on businesses across multiple sectors found that aviation, shipping and chemical industries are most affected.
This is due to energy making up such a high proportion of operating costs within these industries, along with the challenges that come with passing costs onto their consumers.
The study calls the higher costs from rising energy prices affecting these sectors “first-round impacts”. The pass-on prices mentioned above mean that these sectors’ clients must then deal with higher costs too.
At this point, the production of energy-intensive products could become unprofitable due to high energy prices. This may lead to lower production levels, with an additional knock-on effect of temporary shortages further up the supply chain as a result.
After this, the study predicts that “second-round effects” will go on to affect additional sectors. Pointing to their reliance on procuring their products from agriculture, the food and beverage industry is likely to be the next hardest-hit – if farmers have to increase their prices due to higher energy costs.
For the foreseeable, we find ourselves in a new normal. Energy prices look like they’re going to be fluctuating for far longer than everyone will be hoping for. It could be as long as two years before we start seeing stability in the market.
To deal with energy price volatility, businesses in all sectors need to be doing whatever they can. When it comes to mitigating the crisis’ effects, here’s what we recommend…
One of the first – and best – things you can do to reduce your energy bills is to conduct an energy audit. For one thing, you can’t start to save money if you don’t know where your energy usage is going. Conducting one, on the other hand, can unearth a number of energy usage insights and pain points, which you can then go about remedying.
A quick energy audit will be pretty straightforward, but it helps to be as in-depth and extensive as possible, so you’ll need to inspect everything within your business, and that means the building’s interior and exterior, along with fixtures and equipment it uses too.
Whether you carry out an energy audit or not, you can still get into the habit of changing your energy habits for the better, no matter how small they may seem at first. Look around your business’ office. It’s probably well stocked with computers, photocopiers and printers, which are essential to ongoing business operations and are used regularly by employees.
However, only switching on what you need can greatly reduce your bills, especially if you tend to leave them on overnight – even the cost of a single computer and monitor left on for 24 hours can soon build up. Your photocopier can chew through energy more than any other piece of office equipment, so encourage your staff to copy in batches where possible to save where you can.
For more top tips on how to cut your energy usage, you’ll find plenty of effective actionable strategies, from properly warming and cooling the office to watching your water use, right here.
If you don’t have an energy meter in place that’s capable of sending meter readings automatically, make sure you’re providing your supplier with regular manual reads. This will help you to keep your energy costs in control by ensuring that you’re only ever paying for the energy your business has consumed.
If, however, you do have an automated meter reading device installed on your premises, explore the ways in which you can utilise the data it records. For instance, you may be able to access historic consumption data on a half-hourly basis, which gives you the ability to see how and when energy is being used , and make adjustments to improve efficiency in key areas.
Again, expensive upfront costs might not be what you want to hear right now, but solar energy is a great long-term investment, one that can greatly reduce your energy and electricity consumption. Additionally, investing in a renewable energy source like this means you won’t have to play catch up when net-zero legislation comes into effect.
UK businesses can access a range of tax relief schemes to help with energy costs. You may be eligible to receive energy-related tax breaks if your company meets any one of the following criteria:
You can learn more about the available tax relief schemes and check your eligibility on GOV.UK.
Scheduled to begin on 1 April 2023, the EBDS will continue to provide businesses with monetary support to help with energy costs over the next 12 months. Though the new scheme isn’t as generous as the outgoing EBRS, it will help the UK’s most energy-intensive industries to deal with the ongoing energy crisis, which is good news for sectors like shipping and aviation.
To learn more about the EBDS and how it differs from the outgoing scheme, read our full guide on the future of energy support.
No business is immune to the energy crisis, which is why we’re committed to providing ongoing support to all our customers, both big and small. To learn more, visit the energy crisis support hub or call our expert team on 0161 837 3395.
The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of SEFE Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. SEFE Energy accepts no liability for any errors, omissions or representations.
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