As we move from the challenges of 2020 to the hope of 2021, we will see businesses in many sectors taking a new approach to satisfying their energy needs. In this article, I hope to explore some of the key challenges and opportunities that we see emerging over the next 12 months and beyond.
As the world seeks to recover from the shock of 2020, we expect more and more businesses to continue with a focus on sustainability across various sectors such as waste, water and energy. The good news for all of us, is that we are seeing more and more businesses seeking solutions that encourage sustainability in business. This maybe for CSR reasons or due to the demands of clients, colleagues or wider communities. Where possible, we encourage our clients to purchase 100% renewable energy – that is energy generated from renewable sources of Wind, Hydro or Solar.
When you put down pricing and certainty into the same sentence when talking about energy they are not mutually exclusive. We are seeing more and more businesses look at agreements that give them the certainty of pricing on their energy. You may say so what? There is lots of choice out there for pricing energy. One solution that we are very interested in is a model called a Power Price Agreement (PPA), whereby you can purchase a contract for say 12 or 24 months. During this period you pay a fixed price for your energy. What is really interesting is that if the price falls some suppliers and advisors will effectively re-price the agreement at the lower price. This is really a win win for many clients and particularly those who are closely managing cashflow.
It is a simple but true statement in business. For too long now we have had to put up with estimated bills, complex invoicing and no clear or transparent solutions. Smart Metering is coming to your home if not already but over the next few years. We think businesses should be demanding the same level of transparency as many homes will get over the next decade. There is lots of evidence to suggest that if you can tell how much and when you are using your electricity within a 24 hour window you can make real changes. It is not uncommon for businesses to reduce consumption by as much as 15% in a year by better measuring consumption.
Getting good advice today can be hard for many businesses. Energy management is not top of boardroom priorities. However, getting good advice and having a plan can mean you are bringing something new to your business. Saving money is how Procurement begins but empowering a business to make real change on its sustainability agenda, protecting cashflows, reducing risk and delivering operational insights is were we see the role of a purchasing manager going to. We are working with suppliers and advisors to bring these additional benefits to many businesses across Ireland.
If you set yourself one goal for 2021, it has to be about making a difference and adding value. We would be delighted to help you with your energy plans this year. Please contact Alan Cruite - General Manager, Northern Europe to discuss further.