Miles Thomas, Chief Commercial Officer, AMPYR Distributed Energy
The traditional procurement strategy whereby contracts were negotiated yearly to secure the cheapest energy rates worked well when markets were stable and prices low. There were inevitably some disruptions, but these were only temporary before the waters calmed again.
The energy landscape today, however, is fundamentally different. We are in the midst of a transition towards renewable sources whilst the impacts of geopolitical tensions are being keenly felt, with energy prices spiking as supplies of vital fuels are constrained.
Faced with that sort of uncertainty, a short-term approach to energy procurement isn’t just a problem for balancing the books at the end of the year, it is a potentially existential risk. Indeed, businesses – particularly those in more energy intensive sectors – that are continuing to rely solely on electricity bought from the grid and therefore with fluctuating prices have already found that their energy bills are biting deeply into revenues.
However, there is an alternative. One that can help businesses move beyond a short-term strategy to one that secures long-term stability whilst also helping them operate more sustainably. That solution is onsite generation.
A necessary exercise
Businesses that continue to rely exclusively on imported energy are competing against those that are reducing their exposure to risk through investing in their own energy generation. Onsite generation gives businesses control over their energy costs and removes the impact of external pressures and market fluctuations.
A total reliance on the grid risks leaving businesses structurally disadvantaged compared to competitors pursuing alternative options. Onsite generation, on the other hand, gives businesses a structural advantage by reducing grid dependency and instilling agency.
Instead of being a defensive exercise in energy procurement, onsite generation embeds a structural resilience which allows businesses to take control of their procurement.
Taking control through onsite generation
One of the most effective ways for businesses to improve energy resilience is by generating more of their own electricity, for example in the form of large rooftop solar installations or ground-mount solar with a private wire connection, which can be deployed across a range of commercial and industrial assets. These can also be installed without upfront capital expenditure through the use of onsite Power Purchase Agreements (PPAs).
The benefits of onsite generation extend beyond lower energy bills to long-term price certainty and a reduced dependence on volatile wholesale markets. This gives businesses a competitive advantage over their counterparts continually exposed to fluctuating prices and heavily reliant on government support. Taking control of their electricity generation gives businesses the confidence of a long-term and reliable energy procurement strategy.
A far-sighted strategy?
This is not to say that businesses are currently without support. In particular, the British Industrial Competitiveness Scheme (BICS) and the Energy Intensive Industries (EII) Scheme, which are intended to shield businesses from the impact of rising energy costs and reducing energy bills through financial support and levy exemptions, has been a welcome Government response to ongoing instability in the Gulf.
These schemes are unquestionably well-intentioned, but they also do little to actually address the problems that are facing UK businesses because they do not address the underlying cause. As it stands, the UK itself remains reliant on international wholesale energy markets, which we can exert only a very limited influence on. As a result, whilst the Government can use taxpayer funds to help businesses pay their bills, unless businesses find alternative energy sources, the actual cost of energy bills won’t come down in the long term,
The end result is likely to be that businesses become dependent on taxpayer-support to meet their energy bills, which is simply not sustainable in the long-term at a time when there are so many other demands on the Exchequer.
Replacing dependence with assurance
It is right that the Government helps businesses during times of exceptional disruption. However, businesses should also be encouraged to help themselves become more resilient rather than simply offsetting their costs, particularly when the latter comes at a continuous cost to the taxpayer.
There is no reason why the adoption of onsite energy should not be made a pre-condition for businesses becoming eligible to receive government support, this is a no-cost obligation for businesses, unlike the levies BICS and EII are set up to tackle, and no cost to the taxpayer which is ultimately the result of the schemes, delivering far greater savings By providing an incentive for businesses to help themselves, the promotion of onsite generation strengthens industry competitiveness and removes the reliance on taxpayer-funded subsidies. These two things in combination would have a transformative impact on industrial energy costs. Crucially, this allows government funding to be directed towards developing technologies that have long-term potential but are not yet commercially viable without support.
In addition to benefiting the taxpayer, businesses that adopt onsite energy replace their dependence on government support with the assurance of a sustained supply of reliable, affordable power over the coming decades. Alongside offering them a competitive advantage against those who continue to rely on the grid, businesses that invest in greater control over their own energy supply through onsite generation will also be better placed to withstand future volatility. With the UK’s energy challenge no longer simply about securing the cheapest energy contract year on year, it is time for businesses to rethink procurement and look to onsite generation for a successful long-term energy strategy.
This article appeared in the September 2026 issue of Energy Manager magazine. Subscribe here.
