True
Chris Maclean, CEO, True, powered by Open Energy Market
Despite the £4.5 billion allocated to support the manufacturing sector, there was a notable absence in the Autumn Statement of a comprehensive, long-term strategy for the growth of the sector. This has left many in the industry worried about the future and maintaining the UK’s status as a leading trade nation.
It is clear, therefore, that the manufacturing industry must proactively boost the sector’s competitiveness and navigate growth towards net zero. A tangible path towards net zero, without compromising financial stability and growth, lies in effective energy procurement strategies.
Crafting an Effective Energy Procurement Strategy
The manufacturing industry requires a huge amount of energy, and thus is responsible for a significant portion of carbon emissions in the UK. According to the Office for National Statistics, the manufacturing sector was the second largest emitter of greenhouse gas emissions this year.
As such, small fluctuations in energy prices can have significant impact on manufacturers’ bottom line. In fact, over a third (35%) of CFOs in the UK manufacturing and utilities sector say managing overhead costs, including energy usage, was one of their key priorities, according to research from True, powered by Open Energy Market, this year.
There are specific points to focus on when creating an effective energy procurement strategy including: understanding your energy usage patterns, assessing risk tolerance, exploring procurement options, accounting for regulatory requirements, and selecting trusted and reliable suppliers.
Given the volatility of energy markets, regular monitoring and adjustments are necessary to ensure your strategy effectively minimises cost and carbon emission impacts.
Partnering with Specialists
In a dynamically evolving energy market, staying on top of changes in regulations, pricing, technologies and suppliers can be challenging.
For manufacturing and production businesses that are managing complex operational requirements, often over multiple sites, partnering with specialists to create an energy procurement strategy can not only save time on research, analysis and negotiation, but also ensure accuracy and reduce the risk of costly mistakes or missed opportunities.
Energy procurement specialists monitor real time market data intelligence for informed decision-making. Specialists also utilise their expertise to negotiate favourable rates for customers.
For example, last year Open Energy Market’s fund members paid 30.2% less for electricity and 22.9% less for gas versus the market average.
The Role of Technology
Technologies can also help with making business cases for decarbonisation projects that can enhance the effectiveness of your energy procurement strategy, along with the financial and reputational value add that well-executed sustainability projects can bring.
By leveraging integrated platforms that combine your business’ energy procurement data with your net zero objectives, you can accurately assess the ROI of sustainability projects. These solutions analyse data in real-time, consider current energy costs, anticipate commodity price fluctuations, and projected third-party changes. This dynamic approach ensures your strategy remains optimally aligned with realising your business’ net zero goals.
For Alex Farrer, Group EHS Officer for Naylor, which manufactures quality, high-performance concrete lintels, fencing and precast products in the UK, using one such platform has delivered multiple benefits, saying:
"True takes the hassle and guesswork out of validating, comparing, and deciding on which renewable technologies to use and which suppliers to choose from. The combination of real-time energy procurement data with carbon emissions data in one platform allows you to accurately forecast and plan your net zero projects and strategies."
A Resilient Future
The manufacturing sector's journey towards growth and sustainability necessitates proactive measures in the absence of a dedicated industrial strategy from the government. An effective energy procurement strategy, rooted in understanding, specialist insight and support, and technological innovation, will guide the sector towards net-zero emissions.
As the industry navigates the complexities of an ever-evolving economic landscape and energy market, a unified approach combining human expertise and technological advancements will build the resilience of the manufacturing industry for years to come.