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Why energy matters to businesses


The way businesses buy their energy is changing.

The UK’s energy landscape is on the move. Where once energy was seen as a commodity and merely something organisations needed to run efficiently, today a well-thought-out and managed energy strategycan help businesses increase profitability, win new customers and derive genuine competitive advantage over the market.

This shift is to a great extent due to the development of new technologies and renewable energy, which is giving businesses more choice than ever in how they set up and run their energy strategies.

It’s an exciting change, with potential repercussions across a huge array of industries, and first-movers are already appearing in sectors from IT to agriculture.

The focus needs to be on managing overall costs rather than the simpler pence-per-unit of energy supply

E.ON UK chief executive Tony Cocker says: “The impact of renewables, distributed energy, the internet of things and data is driving towards a more distributed energy future, where customers can understand, control and manage their energy consumption and even production.

“The old world, of big power stations with power flowing through the transmission network and down the distribution network to the customers will continue to operate. But the new world will start to take over gradually.”

For businesses, this brings the opportunity to think differently about energy and integrate it more deeply into strategic plans rather than day-to-day operations; something E.ON itself has recognised.

“Our ambition is to partner with business to provide opportunities to help them understand, control and manage the cost of energy use over the long term,” says Cocker. “The focus needs to be on managing overall costs rather than the simpler pence-per-unit of energy supply.”

The triple-win

Renewable sources of energy are bringing about opportunities for businesses, enabling them to be more self-sufficient and to reduce their carbon footprints and positioning them as responsible employers to employees and customers.

“If you have excess capacity on your sites we can help you to monetise that,” says Cocker. “That might be standby generation, but it might be turn-down opportunities, such as fridges.”

E.ON offers the capability to install solar PV systems and battery storage, as well as virtual power plants, which can even see organisations making money from producing energy and selling it back to the National Grid.

New technology also offers significant opportunities for businesses to become more energy-efficient, cutting energy, running and maintenance costs, says Cocker.

“We can help to improve your lighting or building energy management system. If you have your own generation, or you need combined heat and power, we can help you deliver that, or we can maintain existing combined heat and power (CHP).”

Why now?

E.ON has witnessed the shift in the way businesses treat energy for some time. Through a subsidiary, the energy efficiency company Matrix, E.ON was involved with the energy element of Marks & Spencer’s famous Plan A initiative – which aims to make it the world’s most sustainable major retailer – and recently helped Virgin Media to reduce costs and improve working conditions for its employees by upgrading the lighting in one of its commercial buildings.

Its focus has changed in recent years from the traditional aspects of an energy company – conventional generation, trading and upstream gas – to supplying energy, renewables, distribution and energy solutions.

And through that change of focus, E.ON businesses such as E.ON Connecting Energies are helping businesses turn their energy use into a source of competitive advantage.

Seeing the light: reduce costs and improve working conditions for employees
Seeing the light: reduce costs and improve working conditions for employees

International flexible packaging company Goglio, which is headquartered in Italy but has 14 sites around the world, has reduced its energy costs by 20 per cent by installing a CHP plant and cooling facilities, while Reckitt Benckiser has also done the same and achieved a similar saving in their plant located in the North of Italy.

The forces behind such big shifts from well-known brands, aside from the obvious financial and environmental benefits in improving energy efficiency and consumption, is tougher requirements around reporting energy usage, under the Energy Savings Opportunity Scheme (ESOS).

Government figures reveal that more than 3,000 of the 10,000 qualifying firms have yet to report on their energy data, leaving themselves open to a potential fine of at least £50,000 for non-compliance.

“There are obvious benefits to British businesses in carrying out ESOS audits and pushing forward with recommendations,” says Cocker, “whether that is energy efficiency measures, better management of sites or even more future-looking solutions such as demand-side response or virtual power plants. E.ON customers who have started down that road are already seeing cost reductions and improvements in energy security.”

By Nick Martindale