Cost, carbon and resilience: How to protect business finances from the ‘energy trilemma’

A recent independent survey and series of interviews with companies spending more than £20m a year on energy found that energy has replaced Covid as the top business concern. Energy is now a board-level concern for more than 80% of the companies surveyed, demonstrating the impact the global energy crisis is having on businesses.

Not only is rising energy costs a major pressure point, there are also important considerations to be made about carbon emissions and supply resilience, known as the “energy trilemma”. In recent years, decarbonization has moved up the corporate agenda, and as we become more and more dependent on energy, there’s a good chance that demand will outstrip supply. Five to ten years ago, this trio of energy problems at different levels was moving in different directions. Now they are all pulling together and must be given equal consideration by organizations.

Businesses need to understand their buildings’ energy use, where the energy is purchased (hedging or wholesale), how it is generated, and future energy use, including the potential impact of expansion plans. This provides better data for operational and financial strategic business decisions.

A guide to finding long-term solutions to energy crises

As the energy trilemma of cost, carbon and resilience pulls in the same direction, the future of many companies will be at stake. An effective energy management system is crucial to controlling and reducing a company’s energy consumption and reducing costs, risks and carbon emissions.

While the government’s £25bn support package for UK businesses is a welcome measure, it represents a short-term solution to a long-term problem and once the support ends, finance directors will be under renewed pressure to make energy savings.

To simplify the process of identifying long-term energy efficiency improvements in buildings for executives, IES has developed a four-step roadmap that will improve energy use in buildings and deliver cost savings of at least 20%.

The IES guide to reducing business energy costs includes understanding consumption, identifying opportunities for improvement, setting up remote energy monitoring and considering major building investments.

With the help of this guide, companies can manage rising energy costs while aligning with energy self-sufficiency ambitions and ESG or net zero commitments. Focusing on energy efficiency as soon as possible will also future-proof buildings against skyrocketing energy costs and climate change.