Soaring energy prices have sent shockwaves through the global economy, but some industries have suffered more than others. Manufacturing companies in the UK have found the energy crisis particularly challenging.
For these businesses, energy isn't just a cost – it's the lifeblood of their operations. From powering machinery to heating processes, manufacturers are heavily reliant on a stable energy supply. However, recent price volatility has thrown a wrench into their operations, raising concerns about whether they're doing enough to weather the storm.
The argument goes that many manufacturers have been caught flat-footed by the current crisis. While energy prices naturally fluctuate, the recent surge, partly fueled by geopolitical tensions, has been particularly dramatic. Critics argue that some companies haven't prioritised proactive strategies to mitigate these risks.
A recent survey showed that 91% of bosses in the manufacturing sector were concearned about energy security. However, only 27% of these businesses had hired a dedicated energy manger. Therefore, it shows that these companies need to start taking action to protect their businesses. Here's a closer look at the challenges and potential solutions:
- Short-term Fixes vs. Long-term Strategies: Many manufacturers are resorting to reactive measures like passing on increased costs to consumers or reducing production. While these tactics can provide temporary relief, they can damage customer relationships and hinder long-term growth.
- Embracing Efficiency: Investing in energy-efficient technologies like LED lighting and modern machinery can significantly reduce consumption. Upgrading facilities for better insulation and optimising production processes can also yield substantial savings.
- Alternative Energy Sources: While not always feasible, exploring renewable energy options like solar or wind power can offer greater price stability and a hedge against future fluctuations. Government incentives and falling technology costs are making these solutions increasingly attractive.
- Locking in Rates: Hedging contracts can help manufacturers lock in predictable energy costs for a set period, shielding them from short-term price spikes. This approach requires careful planning and market expertise.
The current crisis presents a stark opportunity for manufacturers. Those who prioritise long-term energy strategies will not only survive but emerge stronger. By embracing efficiency, exploring renewables, and proactively managing risk, manufacturers can build resilience and ensure their continued success in a volatile energy landscape.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
