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Industries suffering most from soaring energy prices

Danielle Trigg by Danielle Trigg
September 27, 2022
Reading Time: 3 mins read
Industries suffering most from soaring energy prices
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With the huge rise in energy prices hanging ominously over the country, energy-intensive businesses are amongst those with major concerns. These businesses are predicting sky-rocketing energy prices which threaten their future.

Industries such as manufacturing, hospitality and retail feel their long-term futures are in jeopardy with the steep rise in energy prices. Take hospitality, for instance. For the hotels, pubs and restaurants which managed to weather the storm of COVID and just about stay afloat, they are now facing the devastating impact of soaring energy prices.

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Not only is this sector already dealing with higher food costs, supply chains issues and an often smaller footfall of customer, along with the debt left by the global pandemic, its energy bills are rising to costs which are simply unmanageable. And it is not as though a pub or restaurant can simply ‘turn the heating down’.

Customers are not going to want to sit having a pint in the cold, and since these venues are often in old, large and in drafty buildings, heating them throughout the winter is predicting to force the closures of 80% of pubs. Retail too is another area in deep trouble. After the closure of the highstreets and shops during much of the pandemic, many are still struggling to make up for lost earnings.

Now, with fears that people will have less disposable income to spend, coupled with the 50% rise in the energy cap companies can charge from April 2023, it is forecasted that we will see many more boarded up shops in the future. Factories too are facing massive uncertainty about their ability to operate with such exorbitant prices looming. One clothing factory in Leicester, whose energy intensive production generates energy bills currently amounting to £300,000 per annum, were told this would likely rise to £1.4 million, making remaining open simply unviable.

There are however some pragmatic ways organisations can and are responding. For instance, if money allows, solar panelling is considered a good way to make efficiency savings as not only are they cheap to maintain but they can make a real difference in reducing energy costs.

Given the vast size, openness and high ceilings typical to many warehouses, it can be difficult to save heat, but there are ways that have been highlighted that can help, such as switching from convective to radiant heating via radiators and space heaters; ensuring steam boilers are well maintained and being vigilant about turning off lights.

Alongside this, many companies are investing in the expertise of business energy consultants to guide them through the challenges faced and find practical cost cutting solutions. These experts in energy management are there to assist industries to analyse their energy use and advise on areas such as procurement, energy planning, low carbon policies and work towards reducing overall costs.

The unprecedented situation is grave and deeply concerning for a wide range of industries. Many fear it will spell the end to their business, often still struggling to resurface after COVID. Their futures depend on the government’s response to the crisis and their own ability to engage in cost-cutting measures such as investing in solar panels or seeking the advice of business energy consultants. A cloud of uncertainty sits ominously over these companies over the next few months. And on the British economy in general.

Danielle Trigg

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