Q & A ENERGY CLINIC


From volatility in the wholesale energy market to the benefits of smart meters, Elaine Roberts and Delvin Lane from British Gas address some key issues for operators


We are satisfied with our energy supplier, but another utility


company is offering us a slightly better deal on price. Our site uses a huge amount of energy, so a little saving could go a long way. Should we switch?


Many companies focus solely on the unit price and their latest


invoice and forget to look at the wider picture, such as how much they spend on energy each year and what the options are to reduce their energy consumption. Of course price is a consideration, but by switching to a slightly cheaper rate a business may only achieve a 1-2% saving. By controlling their energy consumption – often with very simple housekeeping tasks like switching off lights and lowering their thermostat – those changes can quickly yield considerable savings of 10% plus.


In the first instance, I suggest that any business with concerns about their energy efficiency should speak to their current energy supplier to make sure they are offering you the best deal for your particular business. Also ask about energy efficiency advice and tools. A responsible energy supplier is not one that wants to sell you a deal based purely on unit price and stand- ing charges – it is a company that can offer you a wealth of energy sav- ing expertise at the end of the phone, and help you see the true opportunity when it comes to energy costs.


Working with your supplier to develop a longer term energy strat- egy will bring your business savings far beyond the unit price.


As a large-scale leisure business, how can we best protect


ourselves from price volatility in the energy market?


Recent months have seen a sharp rise in wholesale energy


Elaine Roberts is director for Sales, Marketing and Medium Enterprise


WHAT PERCENTAGE IS YOUR ENERGY BILL AS A PROPORTION OF ALL YOUR OPERATING COSTS?


30% – largest cost 0.5% – smallest cost 8.3% – average cost across the sector


If as a company you use a “huge amount of energy” then as well as getting a good deal, it’s time to start having a different conversation about energy use within your business. Rather like in the home, everyone has a contribution to make to energy sav- ings by changing a few small habits, for example switching devices off at the end of the day. Other areas worth exploring relate to your actual prop- erty. Efficiency savings can be made by insulating the property or putting in a new boiler or voltage optimiser.


WHAT ARE YOUR KEY CRITERIA WHEN BUYING ENERGY? Cost


Working with the right supplier for our needs


Availability of bundled services (i.e. products and services to improve the way businesses understand energy)


Flexibility of product offering Quality of service Other


6


61% 21%


13% 13%


30% 13%


prices, and it’s realistic to assume there will always be some degree of volatility in the energy market because energy prices are influenced by so many factors – whether that’s political instability in the Middle East, unfore- seen events such as the recent Japanese nuclear crisis, right through to the supply of shale gas in the US. As a business you need to assess your attitude to risk and choose your buying strategy accordingly. It’s very much like deciding on whether to go with a fixed or variable rate mortgage. If you choose to fix your contract price for one, two or three years and prices rise, then you will have pro- tected yourself against rising bills; of course it works the other way too. You have to balance the risks you are prepared to take. It’s important to remember that there can be other financial advantages to knowing your costs in advance – in terms of manag- ing cashflow and making investment choices. These may be more valuable than unit cost savings alone. If you are not keen on a fixed con- tract, you can buy energy in quarterly or even monthly blocks and make a judgement on which way the energy market is moving. This could be a good choice if you have someone within your company who is focused on energy procurement, and if a high percentage of your operational costs come from energy use.


Find out more: www.britishgas.co.uk/business 0845 955 5820


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