The climate change emergency was at the front and centre of the news agenda before Covid-19, and even while we are still in the grip of the pandemic, it is an issue that has rightfully refused to go away.
We have found that in our discussions with clients and potential new customers that the drive towards a carbon-neutral position – by 2050, or even 2030 in some cases – is still a key focus.
Figures released by BloombergNEF showed how purchasing green energy contracts rose by 40% on the previous year in 2019, reaching almost 20 gigawatts (GW), and that appetite for change is still there if our experience is anything to go by.
Our Choice Energy Framework is proving to be a popular option for those public sector organisations looking to not only save money in their energy procurement but also be more ethical in the way they power their facilities.
There has been tremendous interest in securing green energy contracts – ones that use wind and solar energy, for example – as opposed to traditional brown energy that relies on fossil fuel power generation.
The Choice Energy Framework involves up to six energy suppliers who have been shortlisted on the basis of tariff competitiveness, billing accuracy, max/min volume threshold restrictions and terms and conditions.
Fixed and flexible contracts will be offered by the suppliers with the length of the contract varying from 12 months to as long as four years.
If you would like to find out more, please contact one of our team on 01225-867722
Energy is often a business’ biggest running cost after wages. That is why it is crucial to ensure you are not paying over the odds for powering your office, factory or warehouse, particularly if you prefer the security of a fixed-term contract over a more flexible arrangement.
Many energy contracts simply rollover once the current term expires, and this can lead to a business paying more per unit for their gas and electricity than they need to.
With the market as volatile as it is right now, switching energy providers can be in your best interests. Normally, your energy supplier – whether it is one of the so-called ‘Big 6’ or one of the smaller operators – will contact you up to six months before your contract enters its renewal window.
Armed with the facts
At this time, it is important to have all the right information to hand and to understand how, when and where you are consuming the most energy, especially if you operate over multiple sites, as this could impact on how much you eventually pay.
Switching energy suppliers can take anything between four to six weeks but without any disruption to your current supply.
Many businesses, particularly at times of great stress, either don’t have the resources to handle this energy procurement process or do not have the expertise to shine a light on unfavourable terms and conditions which may hit the business financially in the long run.
If you consider yourself to be in such a situation, we’d be more than happy to assist you in getting the right deal at the right time and for the right duration.
The UK, like many parts of Europe, has seen solar power generation records broken in the second half of April, with reduced levels of air pollution and clearer skies due to the lockdown said to be contributory factors.
And there was further good news for the industry with this week’s announcement from the Department for Business, Energy and Industrial Strategy (BEIS) that a new solar farm in Kent has been approved.
The farm is set to be the largest of its kind in the UK and will be located just outside of Faversham.
The subsidy-free project would begin next year, with electricity generation expected to start by 2023. The 350MW farm would feature almost 900,000 solar panels across 900 acres of farmland.
The developers claim that the farm would generate enough renewable electricity to power 91,000 homes, would reduce UK carbon emissions by 68,000 tonnes annually and generate £1m annually for the Kent and Swale councils.
Beyond the immediate impact on health, the current Covid-19 crisis has major implications for global economies, energy use and CO2 emissions.
Analysis of daily data through to mid-April by the International Energy Agency (IEA) shows that countries in full lockdown during this period experienced an average 25% decline in energy demand per week and countries in partial lockdown an average 18% decline.
Daily data collected for 30 countries until 14 April, representing over two-thirds of global energy demand, show that demand depression depends on duration and stringency of lockdowns.
Global energy demand declined by 3.8% in the first quarter of 2020, with most of the impact felt in March as confinement measures were enforced in Europe, North America and elsewhere.
At the start of 2020, it was forecast that global energy investment would grow by 2%; instead, it has fallen by 20% – a fall in spending of $400billion.
Covid-19 impact: the IEA’s sector-by-sector energy breakdown (for the first quarter of 2020)
Global coal demand was hit the hardest, falling by almost 8% compared with the first quarter of 2019. Three reasons converged to explain this drop. China – a coal-based economy – was the country the hardest hit by Covid‑19 in the first quarter; cheap gas and continued growth in renewables elsewhere challenged coal, and mild weather also capped coal use.
Oil demand was also hit strongly, down nearly 5% in the first quarter, mostly by curtailment in mobility and aviation, which account for nearly 60% of global oil demand. By the end of March, global road transport activity was almost 50% below the 2019 average and aviation 60% below.
The impact of the pandemic on gas demand was more moderate, at around 2%, as gas-based economies were not strongly affected in the first quarter of 2020.
Renewables were the only source that posted growth in demand, driven by larger installed capacity and priority dispatch.
Electricity demand has been significantly reduced as a result of lockdown measures, with knock-on effects on the power mix. Electricity demand has been depressed by 20% or more during periods of full lockdown in several countries, as upticks for residential demand are far outweighed by reductions in commercial and industrial operations. For weeks, the shape of demand resembled that of a prolonged Sunday. Demand reductions have lifted the share of renewables in the electricity supply, as their output is largely unaffected by demand. Demand fell for all other sources of electricity, including coal, gas and nuclear power.
Business and Commerce is in a very strange place at this time, some businesses have seen a sharp upturn in turnover as they fulfil the country’s requirements over this “lockdown” period, such as bicycle manufacturers, thanks to the sharp upturn in that particular form of exercise, while others simply had no choice but to heed the government’s advice and close their doors.
The downturn in the UK and world economy has lowered the demand for energy, and wholesale prices have followed suit. Short-term markets have taken the biggest hit, but markets further out have also reduced during this period, reflecting an uncertain future.
Energy Management is always on hand to assist clients old and new, either via a call, an email or through our bespoke portal reporting software ‘EM-Powered’.
Clients who benefit from EM-Powered find it helps them make better-informed decisions over their energy-related strategy.
It enables our clients to view and report on a range of information for your business including consumption, cost data and carbon production, plus provides up-to-date market information.
For more information about EM-Powered and an online demonstration of the portal, contact a member of the team now on 01225 867722 or email firstname.lastname@example.org
For qualifying companies, the deadline for phase 2 of ESOS passed on December 5, 2019.
Some companies have missed this cut-off point after finding the complexities of the compliance process more challenging than anticipated.
Faced with being hit with fines potentially running into tens of thousands of pounds, it is important for those companies to act now.
If you don’t have the time, money or dedicated resource to do this, our highly experienced team can take care of the paperwork on your behalf and help you mitigate those costs.
Here’s a reminder of which companies need to comply:
Those that employ at least 250 people; OR
has an annual turnover in excess of €50 million and a balance sheet in excess of €43 million.
ESOS assessments are carried out every four years and there are five separate UK regulators: Environment Agency, National Resources Wales, Northern Ireland Environment Agency, Scottish Environment Protection Agency and Secretary of State for Business.
The Coronavirus is seeming to have a spiralling effect, causing major disruption to people’s lives in one way or another. It is also having multiple side-effects on the energy industry and the environment, including very turbulent market pricing.
So far, we have seen the following direct impacts on multiple suppliers/companies we work with on a regular basis, some of these include:
A number of suppliers are now only taking emergency phone calls, meaning regular tasks cannot be undertaken.
Suppliers are either not quoting which could result in out of contract rates (OCR) or taking up to 15 working days to quote or not taking on any new clients at all
Western Power Distribution (WPD) has stopped all contracting other than emergency work only, with many Distribution Network Operators (DNOs) set to follow suit.
If businesses are unable to pay bills, and this, in turn, creates a poor credit rating. Energy suppliers will charge a bond as a result which can disrupt cash flows with the knock-on effects potentially felt over the next few years.
Prior to the Covid-19 crisis, Carbon Zero was a major talking point, however, the conversation has gone quiet as short-term thinking has taken over. Personal income and wealth are the primary concerns for people at the moment.
Sustainability on hold?
Many companies had outlined their plans to Carbon Zero targets prior to the pandemic took a grip, which included green energy, renewable energy sources and Electric Vehicles (EV) and installation.
However, since the Coronavirus began it is now estimated that EV battery demand could be downgraded by 4% and solar installations are likely to be 16% lower than previously forecast. It is also expected that 7 in 10 businesses are planning on partially or fully pausing any sustainability announcements.
Many of us are currently working from home or not able to work at all, and that has affected how we communicate with one another. All key green policy meetings have also been postponed and it will be a minimum of six weeks before any UN climate meetings are held in person.
With 16.8 billion people working from home, domestic energy bills could look to increase by £5.2million – which could put a lot of strain on energy providers as well as individuals/family out of work and with no income.
So how does the rest of the world fare?
China has just announced for the first time since going into isolation that they will be relaxing their regulations slightly and allowing individuals involved in the manufacturing sector to go back to work. This could, therefore, cause problems for the rest of the world in terms of energy usage. As their energy output increases and our work decreases, how will this leave us? Will China have the energy they require? Prior to this, China had seen a 25% decrease in its emissions.
Italy has been one of the country’s worst affected by the Coronavirus outbreak, with energy demand on the 18th March recording at being down by 7.45% week-on-week.
Will this ever end?
We all know drastic measures are needed to combat the pandemic, one of which is the cancellation of flights. On the 24th March, we saw 15,650 flights cancelled – the highest number this year.
Another consideration is the number of people – 4.2 billion at the last count – who do not have access to proper sanitation and are unable to follow World Health Organisation guidelines as a result.
What do we expect to see going forward?
In terms of CO2, we could see a similar scenario to the 2008 recession when there was a 6% increase in year-on-year emissions due to businesses and policymakers making up for a loss of productivity. Much depends on the longevity of the lockdown.
Obviously this could have a detrimental impact on businesses attempts to hit their carbon zero targets and the government’s target of being Carbon neutral by 2050.
With a situation where ‘demand is down and supply is up’, oil industry prices continue to suffer in what can only be described as ‘Mad March’.
While the coronavirus pandemic continues to tighten its grip on society leading to a cut in fuel consumption as the global economy slows down, disputes between Saudi Arabia and their rivals has seen the top oil-producing country raise output to full capacity.
Saudi Arabia slashed export prices and said it would pump at a record of 12.3 million barrels per day, flooding the market with oil that it didn’t need. By contrast, producers in the USA’s top producing state, Texas, have asked for regulatory intervention to reduce production.
International crude oil prices LCOc1 CLc1 have dropped about 45% this month and don’t even cover the cost of much of the world’s production, causing energy companies worldwide to drastically rein in their spending. March 9th witnessed the biggest single-day drop of 24%.
The collapse in demand and a diplomatic impasse between Saudi Arabia, Russia and others have triggered unprecedented responses from governments and investors.
With business energy prices fluctuating wildly, knowing when to strike a deal with suppliers has become an art in itself.
Smart energy procurement is one of the main ways in which companies can save money and our expert knowledge and ability to keep track of the markets in these most volatile of times, makes us very well placed to take care of that side of your business.
If you would like to have a conversation with one of our team of consultants, please give us a call on 01225-867722 or visit our dedicated energy procurement page.
Since its introduction in October 2017, Energy Management’s apprenticeship scheme has gone from strength to strength.
Two current employees have graduated from the scheme and now hold key roles within the company, while a third is currently undertaking their Business Administration Level 3 apprenticeship qualification.
Annie Robins and Lewis Payne were appointed as the first apprentices, enrolled through Wiltshire College, and have been shining examples of how the balance of work experience and education can be a win-win situation for employer and employee alike.
Annie is two years into an Account Administration Manager (AAM) role and has recently taken on the responsibility for Supervising the AAM Team’s training and development, while Lewis, in Engineering Support, will be a big loss to the engineering department once he leaves later this year to commence a university degree.
Jac Stone has been promoted from sales support to a Business Development Executive role, whilst undertaking a Chartered Manager Degree Apprenticeship at the University of West of England.
Callum Parsons has recently been appointed to the role of Engineering Support, to work alongside Lewis until he leaves for university. After a period of settling into his new role, Callum will embark on a Junior Energy Manager apprenticeship, with Nationwide Energy Training Services.
Meanwhile, Harry Barter is a Level 3 International Business Administration apprentice.
Personal development is a key component of the scheme which spans both the energy management and water management sides of the business and as a result, the company is looking to open opportunities for upskilling through apprenticeships to all existing staff in areas such as Leadership and Management.
Energy Management CEO Steve Retford said: “All of the apprentices that have come through the scheme so far have done themselves and the company proud and it is a source of great satisfaction to see them flourishing in their roles and adding so much value to the company. We hope to announce more apprenticeship vacancies soon.”