NEWS UPDATE ENERGY DEMAND Reduction in energy consumption across the EU


Business could cut costs by switching energy suppliers


UK businesses could save 4.2% on average by switching suppliers, equating to around £250 for small businesses and £500 for medium sized ones. That’s according to the POWWR


Quarterly Energy Barometer Report, which provides insight into how much energy UK businesses consume and what they are paying for it. The report is based upon over 635,000 separate data points covering a variety of businesses, from boutique start-ups to large industrial and commercial organisations. The report shows that UK businesses


are paying slightly less (1.1%) for their electricity this quarter than last. However, the average cost of energy varies by up to 39% region to region. In fact, data shows that businesses in North Wales pay £1609 more for their energy than those in North East England (£5746 vs £4137 per annum). “We are entering a period of more


stability following years of volatility,” explains David Sheldrake, CRO, POWWR. “However, whilst the overall trend remains for bills to reduce, there are huge differences in average costs for electricity across the UK. It is also worth noting that medium sized businesses that typically use between 30-50 MWh of energy per annum have seen their bills increase by 2.9% quarter on quarter.” During Q4, energy usage has


decreased by 2.7%, from an average 2,1870 kWh of energy a year to 2,1291 kWh. This is 7.8% less than during the same period in 2024. Much of this reduction has been driven by the smallest businesses that have seen their energy usage drop by 3.5% quarter on quarter and 9.4% year on year.


There have been large reductions


in energy usage across several of the major PES areas, with North Scotland seeing a drop of 9.7%, East Midlands seeing a drop of 8.2%, and South Wales seeing a drop of 7.9%. Businesses in South Scotland now use 6655 kWh more energy than their neighbours in the North. Despite these changes, businesses in the UK continue to commit to energy contracts of almost two and a half years (28 months), with little variation between regions. The only exception is large businesses, that prefer slightly shorter contracts of 26 months.


06


Heat taken from the River Thames could be used to warm major cultural and educational buildings on London’s South Bank under a new district heating project worth £72.7m. The Waterloo and South Bank Heat Network, being developed by energy company Hemiko, would use a water source heat pump to extract heat from the river and distribute it through a network of


underground pipes. Organisations exploring a connection include the BFI Southbank, Southbank Centre, the National Theatre and King’s College London. The project has secured £15.6m


from the Department for Energy Security and Net Zero through its Green Heat Network Fund. The funding is to support early development of the scheme, which will expand over time to serve more buildings in South London.


Between 2010 and 2023, primary energy consumption across the 27 EU countries fell by 17.1%. That is the conclusion of the definitive new ‘Index Decomposition Analysis 2026’ undertaken by the Joint Research Council of the European Commission. The most important contribution factor was lower final demand for energy, rather than by efficiency improvements in electricity transformation. The strongest energy efficiency


improvements were in Greece, the Netherlands, Estonia and Denmark, each country with an equivalent drop of at least 30%. Among the worst performing were Romania, Portugal, Hungary, Luxembourg, Lithuania, France, Croatia and Latvia (since departure from the EU, the UK government has published no similar evaluation of its energy efficiency policies). Energy intensity improvements


led to a 21% reduction in household energy consumption levels, a 19% drop in the services sector, and 8% in industry. Surface road and rail consumption dropped by 3%. In contrast, there were increases in both freight and in agriculture of 4%, and of 19.8% in air transport.


The JRC notes with satisfaction that


the main driver of overall industrial energy consumption decline was associated with energy intensity improvements, which contributed to a drop in energy consumption of 46.3 Mtoe. In contrast, structural changes in the industrial sector – a shift from higher energy intensity activity towards companies with lower energy intensity – played only a secondary role in limiting energy consumption. The Analysis concludes that “rapid


advancements in digitalisation, automation, process optimisation, and the electrification of end-uses are projected to play a decisive role in lowering energy intensity, enhancing productivity, and supporting the shift towards cleaner and more efficient


energy systems”. The recast Energy Efficiency


Directive (EED, 2023) has reinforced the framework for achieving binding energy reduction targets, improving the implementation and monitoring of efficiency measures at national level. Similarly, the Energy Performance of Buildings Directive (EPBD) is delivering tangible results through the renovation of existing building stock. “Their combined effects are


expected to consolidate the ongoing decoupling between economic growth and energy demand, positioning the EU on a credible and accelerating pathway toward its 2030 energy efficiency legal objectives and the overarching goal of climate neutrality by 2050,” says the JRC.


River Thames heat scheme planned for South Bank Heat networks are expected to


provide lower-cost energy in the long term by supplying multiple buildings from a central source. The government has said it aims to reduce energy bills by up to £300 over the next four years, with heat networks seen as part of its strategy to deliver cheaper and lower-carbon heating. More than £1bn has been


committed nationally through the government’s Warm Homes Plan to support the expansion of heat networks. Ministers want to double the amount of heat demand met by such systems over the next decade, with more than a million households connected by 2035. The South Bank network will


be low carbon from the start. As buildings switch from gas boilers, nitrogen oxide emissions are expected to fall by 72% over time. Gas boilers are identified as the largest source of nitrogen oxide pollution in central London, with air pollution linked to significant health and economic impacts.


EIBI | FEBRUARY 2026


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