Cost, carbon and resilience: How to protect business finances from the ‘energy trilemma’

In a recent independent survey and series of interviews with businesses spending more than £20 million per year on energy, it was revealed that energy has replaced Covid as the top business concern. Energy is now a board-level concern for more than 80% of companies surveyed, showing the impact that the global energy crisis is having on businesses.

Not only are rising energy costs a major pressure point, there are also key considerations to be made about carbon emissions and the resilience of supply, known as the “energy trilemma”. In recent years, decarbonisation has moved up the agenda for businesses and as we become more reliant on energy, there is a good chance of demand exceeding supply. Five to 10 years ago, this trifecta of energy problems pulled in different directions at different concern level. Now they are all pulling in the same direction and need equal consideration by organisations.

Organisations need to have a deep understanding of their buildings’ energy consumption, where the energy is purchased (hedge or wholesale), how it is generated, and future energy use including how plans to expand may impact that. This will provide better data to inform operationally and financially strategic business decisions.

A guide for finding long-term energy crisis solutions

With the energy trilemma of cost, carbon and resilience pulling in the same direction, the futures of many organisations will be at stake. Having an effective energy management system is critical to controlling and reducing the amount of energy a business uses, reducing cost, risk and carbon emissions.

Although the £25bn government support package for UK businesses is a welcome measure, it is a short-term solution to a long-term problem and once the support has finished, financial directors will once again find themselves under pressure to make energy savings.

To simplify the process of identifying long-term energy efficiency measures in buildings for executives, IES has developed a four-stage roadmap which will improve energy usage within premises and make bill savings of at least 20%.

The IES Guide to Reducing Business Energy Costs involves understanding consumption, identifying room for improvement, setting up remote energy monitoring and considering bigger building investments.

Using this guide, organisations will be able to overcome rising energy costs while also aligning with energy self-sufficiency ambitions and ESG or net-zero commitments. Focusing on energy efficiency as soon as possible will also future-proof buildings against sky-high energy costs and climate change.