BUSINESS HELPDESK


HELP DESK


ENERGY UPDATE


Jeff Topp, head of partner programme at Full Power Utilities, the BMF’s energy partner, advises on immediate action to keep costs in check in the face of unforeseen price rises.


THE CLOSURE OF the Strait of Hormuz has disrupted a key global shipping route for liquefied natural gas (LNG), which plays a major role in the UK’s energy mix, supporting electricity generation and heating across commercial and industrial sectors.


This is bad news for builders’ merchants, where energy use is constant and significant, from heating large warehouse spaces and powering yard equipment to running trade counters, lighting showrooms, charging electric forklifts, and supporting IT and security systems.


The reduction in LNG flows has created uncertainty in wholesale markets. In a market where prices can shift quickly, suppliers are managing risk by introducing shorter quote validity periods, offering fewer long-term fixed- price options, and delaying or temporarily pausing contract offers. With margins already under pressure, unexpected increases in energy spend can quickly affect profitability. The current volatility may prove short-term, but while markets remain sensitive, timing matters.


By reviewing their energy arrangements now, merchants can: • reduce the risk of defaulting to expensive rates • gain visibility of upcoming renewals across branches • monitor the market and secure pricing when conditions improve • ensure contracts reflect how their sites actually operate. In a fast-moving market, businesses that plan ahead tend to secure better outcomes than those reacting at the last minute. 1. Review your current contracts Check contract end dates, rates and termination notice periods across all sites. If you are within


6–12 months of renewal, now is the time to plan your strategy. Multi-site operators should ensure contracts are aligned where possible to avoid fragmented renewal timelines.


2. Avoid out-of-contract or deemed rates


If a contract expires without a new agreement in place, you could move onto out-of-contract rates. These are typically the highest tariffs available and can significantly impact branch performance. 3. Be ready to act quickly In the current market, prices may be available for only a limited window. Having consumption data, site details and decision- makers prepared means you can secure favourable rates when opportunities arise.


4. Consider budget certainty Fixed contracts can provide stability, particularly helpful when forecasting across multiple branches. In a sector where stock


July 2026 www.buildersmerchantsjournal.net


costs, transport and labour are already variable, removing energy volatility where possible can support margin control. 5. Look for practical efficiency gains


Even incremental changes across large sites can add up: • Upgrading yard and warehouse lighting to LED


Switching can cut electricity use by up to 80% per fitting and reduce maintenance thanks to longer lifespans. • Installing motion sensors in low- traffic areas • Reviewing heating controls and zoning large spaces Smart heating and cooling systems - including programmable thermostats and automated HVAC controls - ensure energy is only used when needed. • Maintaining compressors and forklift charging systems • Assessing half-hourly metering for better usage insight


Real-time energy monitoring highlights inefficiencies, unusual usage patterns, and the impact of improvement measures. • Encouraging employee awareness


Simple habits like switching off unused equipment can make a noticeable difference.


All BMF members have access to a free energy review by Full Power Utilities. It’s a straightforward way to sense-check your current position and ensure your energy strategy supports your wider commercial objectives. BMJ


• For more information about joining the BMF and to book a free kVA review, talk to your BMF account manager. BMF members can visit www. fullpowerutilities.com/bmf to book their review.


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