While the UK and Ireland is enjoying one of the hottest summers in recent memory, large energy users have been reminded that they could save between 6 and 12 percent on their bills by reviewing their procurement strategies now and taking on board the lessons of last winter, according to an expert from Vayu Energy.
The long period of unseasonably cold weather coupled with gas field and pipeline maintenance, the closure of the UK’s only long-range storage facility and macroeconomic activity caused a hike in demand and a drop in supply during winter 2017, which forced a significant increase in gas prices across the UK and Ireland.
Speaking at a recent Energy Procurement Strategies & ESOS Phase 2 briefing at Lisburn Civic Centre, Keith Donnelly, senior energy analyst at Vayu Energy, said:
“Last winter saw a ‘perfect storm’ of difficult conditions which heavily impacted on the pricing of energy supplies. The fall out has reshaped the market and caused us to re-evaluate what a good price is.
“Businesses should be prepared for the possibility of a similar situation occurring again this winter and they should take several steps now including setting out a budget early, looking at a market-based procurement strategy and driving usage efficiencies internally. We recommend that all businesses should speak to their energy supplier about their specific needs and get a procurement strategy in place.”
He added: “Companies who manage their energy spend well have a hedging strategy in place. It allows senior management to set controls and limits while not having to spend time managing the energy spend on a daily or weekly basis. The most successful hedging strategies are multi-year and secure prices early. For example, looking ahead we are seeing a lot more value on gas and electricity prices for winter 19 – down 6 percent – and winter 2020 – down 12 percent when compared with last winter – if those rates are locked in now.”
The Vayu event was chaired by Stephen Kelly, Manufacturing NI, and speakers included Nicola Murphy, Green Connect NI, Rachel Sankannawar, Invest NI, and Dr Hugh McGinn, Northern Ireland Environment Agency.
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