“There is a major concern in some sectors, specifically manufacturing and hospitality, where margins tend to be low in the UK anyway, and energy makes up a significant proportion of operational costs.
With a fairly dire outlook for the short and medium-term futures on the power commodity, it’s not looking likely to improve before 2021, and even this may not be the case as we move closer to the season – Power futures for this summer were looking to be fairly seasonally normal when looked at in 2016. I would strongly recommend looking at strategic procurement solutions to ensure costs are kept under control, and the impact is mitigated somewhat by securing gas and power at the best time by market analysis.
Furthermore, we have noted that in comparison to energy efficiency measures, strategic procurement offers much greater loss mitigation potential at the present time – We don’t expect this to remain the case much beyond 2023 when newer technologies will be much lower as a baseline cost, and many may present tax breaks when emerging as a reward for helping HM Government with climate change targets, but certainly, for now, strategic procurement wins. A major manufacturing client of ours has already been able to present over £100,000 savings based on securing when the market was low and being able to take advantage of this over the course of the next few years as prices rose, but costs did not.”