Gazprom Energy, the Manchester-based specialist business gas and electricity supplier, recently conducted research among over 200 energy decision makers, working in large businesses, to better understand the challenges they face today. Set against a backdrop of rising expectations about corporate environmental performance and an increasing number of technological innovations that have impacted on the energy market, the results of the survey demonstrate that the challenges facing energy buyers for large businesses are centred around cost reduction and control.
Of those surveyed, a quarter (26%) stated that the challenge that most concerns them is cost control and improving profitability, while 15% put sustainability and environmental pressures at the top of their priorities. These results signal a strong need for businesses to understand how they can reduce their on-going energy costs and become more environmentally astute whilst also improving the bottom line. Much of this knowledge can be acquired by commissioning an energy audit, enabling businesses to take control through scheduling energy usage and maintenance and implementing effective energy strategies. Responsible energy use is also a growing consideration for large businesses looking to add value to their brand and is increasing in importance for those companies that have corporate social responsibility targets to meet.
Over three quarters of respondents (87%) felt that the effective procurement, use and management of energy is the most important factor in meeting regulatory compliance targets under schemes such as the EU Emissions Trading System (EU ETS) and Streamlined Energy & Carbon Reporting (SERC). REMIT is also relevant to those buying and selling gas under a flexible purchasing agreement. These schemes, currently underpinned with concerns surrounding energy usage from the wider general public, mean procurement and management of energy will become a larger part of many companies’ overall business strategy.
A company’s cost structures – the types and relative proportions of fixed and variable costs incurred by the business – can be profoundly influenced by their energy decisions. This is critical for large companies that hold a tighter budget. Almost all respondents (93%) with 100-499 employees felt that cost control and improving quality were most relevant to the effective procurement, use and management of energy.
When considering possible risks to energy supply, there appear to be significant concerns that could be alleviated through improved buyer insight into changes within the energy market. For example, 80% of respondents are concerned equally about price changes and the impact of energy restrictions. In the current economic and environmental climate this includes a range of factors such as the impact of ageing infrastructure and a rising population. Only half of those surveyed (54%) currently counter potential energy supply risks by improving supplier management and managing down consumption to reduce restrictions. Energy suppliers and consultants can offer buyers in-depth market intelligence and support with forecasting, gained largely through data science, to give them the opportunity to fully optimise their energy strategies and mitigate risk.
In an era when we are all trying to be more environmentally conscious, large businesses have a responsibility to ensure that their energy usage is as economical as possible. By having greater understanding of consumption and better tools to enable them to closely monitor how this is changing over time, organisations can ensure they proactively address their corporate social responsibility in terms of energy reduction.