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CBI @10am: How can my business deal with rising energy costs?

In this session, recorded 25 May 2022, the CBI’s Programme Director for Decarbonisation, Tom Thackray, was joined by Katherine Chapman (Ameresco) and Gabriel Wondrausch (SunGift Solar) for an expert discussion on how businesses can mitigate rising energy costs and how investment in renewables could help create energy resilience for the future.

25 May 2022, 4 min read

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— Our bi-weekly broadcast will help support you through the next phase, giving you expert insight and intelligence to continue adapting, and providing the guidance you need to restart and boost your business, and build resilience for the new normal.

Speakers:

  • Tom Thackray, Programme Director – Decarbonisation, CBI
  • Katherine Chapman, Managing Director, Ameresco
  • Gabriel Wondrausch, Strategy Director, Sungift Solar
  • Jeevan Vasagar, Climate Editor, Tortoise Media (Chair)

In this session:

Tom Thackray

  • Energy prices are not the only thing facing businesses now - energy costs should be understood in the round alongside other headwinds.
  • Businesses don't have a price cap like consumers too and issues pre-existed the conflict in Ukraine.
  • Lots of firms at the moment are buying energy at spot price - 500% above normal levels or trying to negotiate contracts - starting position 2/3x what they were on previously.
  • Doesn’t impact all businesses equally – depends on whether they’re able to pass on costs and how much energy they use. EIIs / industrial sectors feeling particularly under pressure.
  • I don't think we've come to the end of the road on political response - reductions in council tax but will need to do more when price cap rises further - on business side of things.
  • Windfall tax - superficially attractive - huge amount of investment which is required - solar, nuclear, backup and CCUS. If you're penalising businesses with a windfall tax it makes the relative investment to other countries less competitive.
  • Environmental objectives: from biz perspective, no sense of softening their commitments. Many have made long term net-zero commitments.

 

Katherine Chapman (Ameresco)

  • Provide services that range from onsite generation, efficiency projects and renewables.
  • Now seeing more businesses / individuals exploring renewable solutions for the longer-term. For many it's to take away the volatility we've seen over the past 12 months.
  • More businesses are now thinking about energy strategies like a financial strategy - you have 1-10 year write outs - about helping customers in a more sophisticated energy journey.
  • Could be onsite renewable generation, but there are other commercial solutions we could provide for those facing immediate challenges.
  • For many, significant investment in renewable energy is becoming more attractive.
  • Government support for EIIs - some support schemes out there and others about to be added. Like to see those expanding in terms of sectors it covers and support it provides.
  • Expecting volatility to last another 12-18 months.
  • Appetite for wider solutions, particularly on on-site generation. Tying it in with carbon / decarbonisation objectives - seeing them as linked.
  • Spending more time speaking about energy at board level as they look to diversify energy sources and boost their resilience.
  • You can find out more on their website here: https://www.ameresco.com/

 

Gabriel Wondrausch (SunGift Solar)

  • We've been going 17 years and have seen significant growth in that time: "Solar-coaster" - increases in demand and dips due to government incentives.
  • More growth and higher demand than we have ever seen at the moment.
  • When it comes to fitting solar to new builds and older builds - main thing is understanding the site and the energy demand e.g., are you considering electric vehicles / vans and electrifying fleets in the coming years? Power required to deliver it could be much more than you need now. Need to factor this in at the beginning - need good consultation with the clients.
  • Technical - upkeep and maintenance programme to ensure it delivers expected.
  • How suitable is solar for SMEs? Regardless of building size, there is something you can do – but most effective is when there is high energy demand and roof space.
  • Work a lot with landlords and tenants - in lots of cases tenants want to lower energy costs - usually landlords are happy to do this and will purchase system from the tenant when they leave.
  • Landlords who own lots of property - it's profitable for them. Some then sell that energy to their tenants.
  • You can find out more on their website here: https://www.sungiftsolar.co.uk/

Useful information

For further information on our Managing Rising Energy Costs campaign, visit https://www.cbi.org.uk/articles/manage-rising-energy-costs/

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