81% increase in energy bills by 2021 predicted for UK commerce and the public sector

Posted: December 02, 2011

Companies must make long term energy management a priority, new Power Efficiency research finds

2 December 2011, London, UK – Power Efficiency, a Balfour Beatty company specialising in energy management and carbon consultancy, has today released the findings of a new research report entitled ‘The Energy Price Challenge’.

The research, conducted with independent market analysts Waters Wye Associates,
indicates the need for a “change in boardroom attitude” towards energy, as pressure increases dramatically on business margins and on public sector costs.

Energy costs have increased by 77% since 2004 and this trend is expected to continue with a further 81% rise expected over the coming decade. This indicates that by 2021 energy inflation will have added £8.4 billion per annum to the fuel bill of UK commerce and the public sector combined . This represents an energy bill rise from £10.3 billion to £18.7 billion per annum.

Mark Callaway, energy markets director at Power Efficiency, commented: “Both the UK public sector and business at large needs to face up to a new reality. After a long period of deceptively low energy costs, we have emerged into an era of high and rising prices that have made effective energy management a board-level issue.

”The policy framework being put in place by Government to cut emissions and improve energy supply security will also pose major challenges for UK businesses and the public sector. It is critical that organisations have energy management strategies in place now, for the next decade to protect profitability and defend budgets through a period of rising energy inflation.”

The report identifies two key drivers for the price increases: rising prices for fossil fuels from international markets combined with higher costs for implementing policies designed to reduce UK carbon emissions and improve the security of energy supplies.

Mark Callaway added: “The Government recognises the need to decarbonise our generation sector, and has made it a major motive for its Electricity Market Reform (EMR) white paper. Power Efficiency believes that the package of measures in the EMR white paper must be implemented with care to avoid damaging the UK’s competitiveness. The EMR reinforces the trend for the Government to tax energy use and make customers pay for an increasing number of subsidies offered to investors in low carbon energy sources.”

The full Power Efficiency white paper can be downloaded at www.powerefficiency.co.uk/white-papers

For further information please contact:

Robin Swinbank
Power Efficiency
07831 364744
Robin.swinbank@powerefficiency.co.uk