Business Advisory

Energy Price Rises Will Hit Both Domestic and Business Consumers

By October 10, 2022 No Comments

Winter is coming to Europe, and so far already in October, there have already been huge demonstrations across the UK in protest to the cost-of-living crisis and energy price rises. The conflict between Russia and Ukraine is one of the main factors causing an energy shortage across Europe and prices in the UK are twice as high as last winter with an 80% increase in domestic gas and electricity bills.
The UK’s National Grid has even mentioned the possibility of UK blackouts this winter if energy supplies were to run too low.

energy price rises
Energy prices will rise this winter

European Governments are taking action

Across Europe, Governments are now putting measures in place to reduce the demand for energy as a pre-emptive action to the energy shortage. In Italy, the central heating will be restricted this winter and residents are being instructed to turn down their central heating by 1 degree. France has declared that homes and offices will be heated to a maximum of 19C and no hot water in public buildings. Spain will also adhere to the 19C temperature and shop window lights must be switched off after 10 pm. In Germany, public statues and monuments are no longer being lit up and heating in entrances of public buildings and foyers is likely to be switched off also.

Many businesses will suffer

The energy crisis is not only a domestic problem, the supply issues and rising prices will also hit the business sector and the real worry for businesses is that they have less protection than domestic customers, and while a UK Government initiative – Supported Wholesale Price – has been introduced on 1st October, some businesses may still face energy bills up to 5 times higher than what they’re currently paying from October onwards.

Sectors that are heavy energy users such as manufacturing and industry in the North of England will face hugely increased costs and difficulty in then passing on these costs to consumers. While many of the larger companies may be able to withstand the price rises better, there are still sure to be some casualties.

It is likely to be smaller businesses in sectors such as hospitality that will struggle to deal with such price increases. Pubs and breweries may have to face price hikes of up to 300% with little or no chance of being able to pass these costs onto the customer. Charging £20 for a pint of beer is simply not going to be a viable solution as this will surely result in no customers at all and certain closure.
Industry leaders are calling on Governments to take more action to address these rising costs and every person and organisation must also do all they can to minimise energy usage.

Beer price may reach £20 to offset energy costs
Pubs would have to charge £20 per pint to offset the increase in energy costs

Clearly, there has never been a more important time for every business to take control of its energy usage. An Energy Management System such as ISO 50001 will provide your organisation with a framework to:

  • Define a strategy for the efficient use of energy
  • Create targets and objectives for this strategy
  • Make data-driven decisions regarding energy use
  • Improve energy management
  • Save money on energy costs

Contact Vassallo Associates today to discuss your energy management requirements. We will be happy to provide you with a no-obligation consultation to see how we can best assist you

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