Businesses need to do more to tackle the dangerous ‘energy trilemma’ which threatens to wipe out their profits completely.
Squeezed margins are not the only risk to businesses’ viability going forward, according to one of Britain’s leading renewable energy experts.
Rising energy costs, the pressure of cutting carbon footprint and fears over the uncertainty of power blackouts in the future – the growing ‘energy trilemma’ is a major challenge facing every business in Britain today, says UrbanWind CEO Paul McCullagh.
“This trilemma isn’t just a problem for national governments –increasing numbers of companies are now realising the threat it poses to their future,” he explained.
UrbanWind says more businesses need to switch on to the challenge and re-examine their energy policies and strategies.
It is urging businesses in all sectors to “grasp the nettle” and take a hard look at what they can do to meet the energy challenges they face, or risk the threat of rising energy bills wiping out their profits over the next five years.
“Today 94% of major energy users have or are actively pursuing an energy reduction programme,” Mr McCullagh said.
“There is also a growing appetite for on-site generation – which is allowing companies to cut their carbon footprint and is helping shield them from a volatile energy market. It can also be a valuable extra source of revenue.
“Energy is now firmly on the boardroom agenda – with smart companies re-introducing the ‘energy department’, tasked with developing working strategies to help them meet the growing challenges ahead.
Energy directors are also appearing in the boardroom, as rising costs, worries over supply and meeting carbon targets is pushed further up the agenda.
Paul McCullagh, stressed that businesses need to draw up clear and sustainable energy policies that tackle all three aspects of the ‘trilemma’ that threatens their future prosperity.
He added: “Events earlier this year surrounding gas supply to Ukraine and the news that China has signed a massive deal to import LNG may not seem to have much relevance to Britain’s retail businesses.
“But events like these have an impact on the nation’s energy security – and that does matter, whatever sector your business operates in, especially for energy intensive use, like retail.
“Security of energy supply is just one part of it. Rising energy costs – which are forecast to double by 2030 - and the need to meet carbon reduction targets are also major challenges for every business in this country.
“The impact is enormous. Some experts are warning that energy costs could more than double within 10 to 15 years. Companies that don’t react to this threat will face very serious problems further down the line.”
He continued: “The focus on energy-saving measures we are seeing from major users needs to be adopted by all sizes of business.”
UrbanWind is seeing a rise in interest in on-shore wind turbines from businesses with land assets, as they give serious consideration to utilising on-site or embedded generation measures, as part of their approach to meeting the challenges they face.
Paul McCullagh continued: “We now have more than 100 potential turbine sites in the planning process.
“We continue to see a surge of new customers and potential customers looking to become independent of the burden of ever-increasing power bills. It really has become a key issue.
“More and more companies, landowners and organisations like the idea of taking control of their energy needs and of the possibility of extra revenue streams that renewable energy brings them.