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How disruptive changes in energy may affect your business

By Reemesh Patel

SK Energy

THE supply of business electricity in the UK used to be simple. Huge ‘factories’ remotely generated vast quantities of baseload power at a set price, which changed occasionally. Your company needed a certain amount of power and an energy provider supplied it.

However, the energy system is changing fast. Technological advances, rising customer expectations and volatile costs make that traditional, centralised electricity market structure increasingly incompatible with the needs of the 21st century.

So what’s this transformation towards a more service-driven model likely to mean for your business?

1. More new suppliers offering an increased number of services

There are 50+ suppliers of electricity in the industrial and commercial (I&C) electricity market, offering a wide range of supply contracts and ‘valued add’ products such as Energy Services.

As a result, businesses aren’t always selecting the power supplier offering the lowest costs. Increasingly, they’re looking for energy partners that are competitive on price and that offer additional services or opportunities. And this means you have a bigger choice, and more opportunities, than ever before.

2. New technologies leading to more change

New innovations, such as affordable mass energy storage and ‘smart’ networks will add to the speed at which the energy market changes.

For businesses, the first of these changes will release the potential for more revenue and greater resilience. The second – a smart and decentralised grid – will also provide potential for additional income by establishing local and/or regional energy markets. Having the flexibility to adapt to change will give your business a distinct advantage.

3. More smart meters enabling better demand management

Installing a smart meter is one of the first steps your business can take towards playing a part in the UK smart grid of the future. By enabling half-hourly settlement for all customers and providing the associated data for analysis, smart meters could revolutionise how your business understands its usage and manages its demand. This could help you save on your energy costs, and have the potential for reducing your carbon footprint and boosting your sustainability credentials.

4. More decentralisation, more connectivity, more money

Between 2011 and 2017, embedded or distributed generation – connected directly to the distribution network, rather than the national transmission network – grew from 12GW to more than 40GW.

This move towards decentralisation and an increased number of local and regional connections is set to continue. Which means that if you’re generating your own electricity, there’ll be even more opportunities to sell your power and add to your income.

5. More decarbonisation; more intermittent generation

The Government’s drive to decarbonise energy has led to generators moving away from coal.

Many generation units have chosen to play their part in the decarbonisation drive by relying more upon solar photovoltaic (PV) or wind turbines for their power. While this is good news in terms of reducing CO2 emissions, it also indicates a greater reliance upon intermittent, weather-dependent sources.

For your business, this creates opportunities as a self-generator on two fronts: either as a small-scale solar PV or wind operation, or as a supplier of a non-intermittent kind of power.

6. A fairer system of charges

Currently, the highly centralised model of generation and transmission forms the basis of how suppliers charge for business electricity. However, as the industry transitions to the new service-based model, the way it charges customers is open to review.

This could create an opportunity for you to negotiate better deals with your existing supplier (or a new provider), and/or to reap the benefits of being a self-generator.

Visit www.skenergy.co.uk or call 01933 448622 to find out how SK Energy could help you change how you procure and view energy.

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