Are you ready for a more volatile energy world?

Andrew Horstead -

The ink is barely dry on the Energy Bill, described as the biggest shake-up in the energy market since privatisation, yet some commentators are already talking of more change ahead.
With energy increasingly a hot political topic – or perhaps that should be football - the looming General Election and Scottish independence referendum could bring yet more policy upheaval just as Electricity Market Reform really starts to kick in.

The prospect of a vote on Britain’s EU membership after the next election adds a further unknown to the political landscape for energy.

On top of these uncertainties, concerns over the looming generation gap in the UK and the impact of wider issues such as threats to gas supplies in Europe also means the risk of energy shortages is increasingly appearing on the boardroom agenda.

Of course, energy buyers and managers have already had to deal with significant change in recent years. Much of that has been driven by the impact of rising costs, not just for energy itself but for third party charges for things like network upgrades.

Growing environmental concerns have also forced organisations to look much more closely at how they source and use energy.

Although the ending of the era of cheap energy has posed significant challenges, coping with commodity cost increases is something successful businesses are used to dealing with.

Rising prices also present opportunities for the more forward-thinking and innovative companies to look to gain competitive advantage.

Better buying, energy efficiency and looking at developing onsite generation can all help companies steal a march over the rivals by reducing costs.

But while many businesses have adapted to a higher price environment - and to some degree can pass increased costs on - the greater volatility which is being seen on energy markets is harder to handle.

Most commentators agree that the long term energy price trend is rising. But predicting where energy prices will be in five or ten years’ time, the degree to which they will fluctuate in between and the likelihood of supply shortages is increasingly difficult, particularly against a backdrop of much political uncertainty.

There are no straightforward answers to these questions but many businesses are already taking steps to minimise their risk and in some cases  take advantage of the opportunities which volatility presents.

Later this month the annual Green Corporate Energy summit will bring together hundreds of senior level people with an interest in energy to discuss the big challenges but more importantly look at what businesses are or could be doing to reduce risk and maximise opportunity in an uncertain world.

As partners for the event Utilyx is hosting a session asking: ‘Are you ready for a more volatile energy world?’ I will be providing insight into key issues including the future for energy prices and the risks of blackouts.

The event will also aim to draw on the experiences of the audience to identify the five key measures that businesses can take in a more volatile energy environment.

I’m really excited about the potential for this session. From the work Utilyx is currently involved in with clients, we are seeing some many innovative approaches being taken by businesses to better prepare themselves for the challenges they see ahead. 

What often starts as an exercise in dealing with one aspect of energy – evaluating different technologies for reducing consumption for example – also increasingly develops into a more far-reaching approach which delivers much deeper cost and carbon benefits.

In an energy world where there are so many unknowns, the ideas and experience of others can help you better understand the questions you need to be asking and to start to find the answers.