Energy costs have risen 37 per cent over the last five years in UK manufacturing
26 per cent of companies surveyed say energy costs constitute 10-20 per cent of their operating costs
55 per cent of correspondents reported that energy prices are impacting competitiveness
82 per cent of respondents stated power continuity being a major or significant concern to their business
49 per cent of respondents identified high cost as the main barrier to a decentralised energy solution.
Energy security and cost concerns are highlighted as key barriers for UK industry to realise the benefits of decentralised energy, according to a report launched by Aggreko.
Entitled ‘Bridging the Energy Gap,’ the new report is the result of 200 key energy decision-makers across industry offering their views on decentralised energy in the UK. It finds that energy security remains a major or significant concern for most respondents (82 per cent), while reducing energy consumption is viewed as a medium or high priority for the vast majority (94%) of correspondents.
With energy prices continuing to rise over the last five years, knowledge over what interim and affordable energy solutions are currently available is still required. Aggreko’s report acknowledges that, faced with such circumstances, finding the right long-term solution while meeting business short-term needs around energy security and production continuity can be even more challenging. It points out that many energy users across industry are now finding themselves caught between this desire to reduce their costs and environmental impact, while also navigating the technical and financial issues these solutions must solve.
The report addresses this situation and engages with a number of concerns, including electricity pricing, energy security and usage, attempts to reduce consumption, the appetite to move towards a decentralised solution, and barriers to adoption. It goes on to look at finance and incentives, with a contribution from Caroline Bragg, Policy Manager at the Association of Decentralised Energy.
Caroline comments: “This report provides an extremely useful overview of the barriers to deployment of decentralised solutions for industrial energy users. Decentralised energy solutions, such as those provided by Aggreko, enable more flexible demand and reduce energy consumption, allowing industrial and business users to participate more fully in the UK energy system; users can increase their competitiveness, reinforce their security of supply and help towards meeting their sustainability and low carbon targets.”
Aggreko’s report identifies decentralised energy solutions as a potential answer to industry cost and consumption concerns, provided barriers surrounding its adoption are overcome. Indeed, nearly half (49 per cent) the respondents cited prohibitively high investment costs as a reason why they had not adopted decentralised energy technologies, such as solar power, CHP, gas generation and wind power.
The document highlights that by hiring these solutions instead of purchasing them, companies could enjoy the benefits of decentralised energy without being bound by capex restrictions. It also suggests that hiring can help energy users avoid the long payback periods which may otherwise deter them from implementing new, energy-efficiency technology and decentralised energy solutions.
With this in mind, the report proposes viewing hire as a bridging gap between current overreliance on the national grid and a future where the majority of electricity is generated on-site. By doing so, companies can more easily access innovative, secure and environmentally-friendly technologies that could offer immediate savings.
“The statistics from this report show that UK industry requires some education in how it can benefit from secure, cost-effective and efficient decentralised energy solutions,” said Chris Rason, Aggreko Managing Director, Northern Europe. “We hope our findings show how there is an opportunity for more companies to implement a decentralised energy option, and using hiring as a bridging gap solution does not require a significant capital outlay.”