Energy purchasers put price before legislation

21 July 2011

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22 July 2011 | Adam Leach

Energy buyers are more concerned with cost and security of supply than complying with legislation, a report says.

The annual Business Energy Index by npower, published this week, found that businesses see fluctuating costs and supply levels as the biggest risks to managing energy. Scoring highest – with 10 denoting very high risk – was supply costs (6.6), then security of supply (6.1). Legislative compliance and reputation followed (5.8).

Despite energy being identified as a significant risk to overall business performance (5.7), many companies have yet to establish formal energy management policies. While 91 per cent of businesses have a formal policy for managing health and safety (4.8 as an overall risk), only 83 per cent have one for energy.

David Cockshott, director of industrial and commercial markets at npower said: “It is worrying that while businesses have identified that risks associated with energy – from security of supply to cost – pose a real threat to their immediate and future operations, many have admitted to not having a strategy in place to manage it. While many businesses have embraced the benefits of energy management and energy efficiency, when it comes to solutions to manage risk, there is less of a focus.”

The report, which was based on in-depth interviews with energy buyers from 200 small- and medium-sized enterprises and 100 major energy users, also found that despite companies reporting a need for self-generated energy, they don’t feel it is down to them to finance it, with 61 per cent calling on the government to issue grants.

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