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availability, while there was a tendency for buyers to take a shorter-term forward hedging view than previously. The latter was enhanced by the wholesale market returning to a state of contango.

WHAT ASPECTS OF ERM DO YOU SEE CHANGING IN THE NEAR FUTURE? M&C Energy Group surveyed the views of attendees at its Global Energy Conference in Munich in February. Buyers and decision-makers for some of the largest energy users in Europe set out their views on future energy prices, decarbonisation and business impact. The respondents expected end-user industrial energy costs to rise between 20% and 60% by 2015, and higher by 2020.

Between 46% and 36% believed decarbonising the EU economy, although worthwhile environmentally, mostly

represents a threat not a positive business impact.

Asked to order priorities, ‘affordability’ and ‘security of supply’ came out strongly ahead of ‘sustainability’. Regardless of future price

development, M&C sees the trend of smart energy risk management moving further from a purchasing strategy dominated by emotional responses to market movements. This should be replaced by calm, rational responses to events – “if the market rises, we take this action,” underpinned by a realistic and robust risk policy allied to effective objective setting, strong corporate governance, measurement and controls, and the appropriate tools. Other factors will influence risk management and decision making, e.g. on-site generation. Looking to take advantage of incentives to generate from

n times of recession it is easy to see carbon commitments as an expensive desire that don’t really help the bottom line. However, carbon has become a currency and steps to reduce carbon output can bring real savings to companies.


while reaping the benefits.

Energy and carbon can be thought of, in many ways, as one and the same – reducing one reduces the other. Policy in many countries is forcing organisations to reduce carbon emissions through taxation and legislation – comply or you pay a penalty.

So it makes sense to reduce carbon

emissions. Yet a recent survey in the UK showed 40% of financial directors and 50% of energy managers didn’t know the costs of CRC to their business. More worryingly, 26% of businesses didn’t know their annual energy costs and 21% didn’t know how much they had invested in energy efficiency over the last three years. (Source: survey by Siemens of 600 UK businesses ahead of the publication of the first CRC performance league table). To take the hassle out of carbon management, more and more organisations are approaching M&C Energy Group to work with them to reduce energy costs, and provide effective and efficient risk and carbon

management services. And if new plant or systems are required, M&C can implement the changes on the organisation’s behalf, allowing the company to concentrate on core business

With M&C’s help organisations will pay less for utilities. They will only pay for what they use, minimise their consumption and have a constantly monitored

position, while reducing their carbon footprint. They will better understand their risk managed strategy towards carbon, be able to report in a consistent manner to their stakeholders and be able to react to energy and carbon price changes. This enables a company to maximise the benefits from legislative instruments and minimise exposure to adverse publicity. The reality today is that organisations are being pressurised from all sides to reduce carbon output. They see the benefits of improved green credentials as a corporate differentiator and in CSR terms, need to demonstrate to customers, investors and the wider public they are serious in their efforts to fight climate change.

However the biggest thing M&C can help bring about is savings to bottom line through carbon management. For Draka Cables, M&C helped realise savings of €1,614,978 on an annual energy spend €17m at 11 sites across Germany, France, Netherlands, Sweden, Spain and Norway.

Automotive component manufacturer Visteon saved €1,319,240 on an annual

spend of €19.5m across nine sites in UK, Spain, Germany, Italy and Portugal. The M&C process starts with an audit giving a comprehensive investigation of historical volumes, costs and consumption trends. Normalised performance indices are established and compared and contrasted with similar facilities. Any anomalies in consumption trends will provide further focus to the on-site activities.

The survey focus is to identify energy and carbon-reducing recommendations that are practical; low or no cost to implement; and provide fast return on any investment. They should also be straightforward to implement; acceptable to staff and management; and demonstrable and verifiable through actual measurement, where appropriate. Contact M&C Energy Group and find out what cost savings you could be making while still achieving your commitment to carbon reduction. Contact M&C Energy Group at 0800 279 5500, and


low carbon sources will open up new dimensions in investment risk appraisal and optimising self-generation for use on- site or for export in combination with the network ‘import’ requirement. Potential exists for developing a multi- faceted and integrated approach to risk- optimising all aspects of an organisation’s energy portfolio.

The prospect of increased coupling of Europe’s power grids has potential to improve access to markets and products, while offering larger companies the opportunity to further leverage their continental portfolio.

If you think M&C Energy Group can help you then contact them at M&C Energy Group Limited, Claymore House, Enterprise Way, Dunfermline, Fife KY11 8PY. Tel: +44 (0) 1383 745000, Fax: +44 (0) 1383 745153, Email:

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