How is the energy market likely to affect business in 2017?

By Ken Warner, MD, Energy Renewals

As the first few days of 2017 are underway, it’s that time of year when we take stock of where we’ve been and look forward to a new year.

For us at Energy Renewals, 2016 was incredibly exciting which saw us take on new employees expanding both our sales and our senior management teams.

To some extent, the growth of our business reflects a change in the way organisations approach its energy management. More and more businesses are embracing new technology to deliver smart and efficient savings as well as undertaking energy audits and embarking on energy management programmes which deliver savings and reduces a company’s carbon footprint.

As such, much of our focus in 2016 has seen us evolve from solely an energy broker company into an energy consultancy with the expertise to help companies take advantage of a changing energy market.

Of course, sourcing the very best tariffs at the most competitive price for our clients remains a core element of our business and will continue to do so, but we are now pursuing larger savings which most companies can enjoy when implementing an energy management programme with further gains to be had when utilising smart technology.

We believe the use of smart technology to better manage energy will gather momentum in 2017 as more and more companies seek to benefit financially from reducing energy consumption, especially as energy bills are predicted to increase again. In fact, energy prices are expected to rise 5% this year, according to The Telegraph following a series of rises in fixed-price tariffs in 2016.

In December we highlighted a report which reflected businesses’ concern about rising energy costs with bosses wanting to see government policy tackle the issue. However, we have always maintained companies can take the lead by outsourcing an energy audit in order to develop a cost-efficient energy management plan. In 2017 we think we’ll be seeing an increasing number of companies pursue this route.

One of the ways we expect organisations to benefit, whether they’re large corporations, multi-site retailers or SMEs, is by adopting Demand Side Response or DSR. DSR provides a smart way to reduce electricity usage at times when companies don’t need it and feed it back to the National Grid enabling it to better manage surges in demand. What’s more companies participating in DSR receive financial incentives, but take-up is currently low mainly due to a lack of understanding and a perception that it’s complicated and that an in-house expert is required.

This is gradually changing. As the National Grid promotes DSR and companies like Sainsbury’s and the London Underground report their gains as a result of pioneering DSR so the concept will become more widely understood, company bosses will be more open to trialling it and companies like ours will develop a larger portfolio of clients benefitting and so its adoption will gather at a much faster pace.

The Department for Business, Energy and Industrial Strategy and Ofgem are currently looking into a number of ways to develop a flexible energy market including a wider deployment of DSR and its findings are due to be published in the spring. We expect to see uptake of DSR and other smart energy options among businesses to become more apparent towards the end of 2017.

Meanwhile, on the global stage we will start to see a host of environmental and energy innovations and events take shape including the start of fracking in Yorkshire and Lancashire which will ascertain whether quantities of gas will make it commercially viable. But with just 17% of people in the UK in favour of fracking, we expect to see more sparks flying, extensive debate and further demands to put a stop to operations.

According to the round-up in The Guardian, air pollution will figure highly this year with London likely to come under pressure to follow in the footsteps of Paris, Madrid, Athens and Mexico City and ban diesel vehicles in the city centre. The Paris Agreement will continue to be in the headlines both as a momentous global agreement to reduce emissions and as president-elect Donald Trump with his well documented denial of climate change takes up residence in the White House all eyes will be on America and whether the new administration will stick to the agreement.

Finally, the UK government is being urged to seriously consider implementing a flood plan following the devastation from Storm Desmond in 2015 and a warning from a climate change adviser that the UK will face major flooding on an annual basis.

Of course these are just a few of the environmental, energy and sustainability topics we are likely to see in 2017, but if your company is seriously considering ways to reduce energy consumption, develop a more efficient energy plan and to benefit from the savings which will follow, you can get ahead of the curve by talking to us today.