Businesses’ Burning Questions Answered:
2023 Energy Predictions

By Andrew Grover, CEO of Advantage Utilities.

Over the past 18 months, we have witnessed extremely volatile energy markets in the UK and abroad. Despite recent respite - with reduced costs for consumers - predicting the direction of energy markets in 2023 is no easy feat. However, there are steps facilities managers and businesses can take that will help them to better prepare for energy developments over the course of the year. By coupling a risk-managed approach to purchasing energy with auditing products and services that can optimise energy efficiency and saving measures, businesses can reduce consumption and costs despite the challenges ahead.

This article discusses three of the key energy challenges facing businesses in 2023 and some mitigation options.

Dialled Down Business Support

With support for businesses to be dialled down after March, facilities managers should instead look for ways to make savings elsewhere, and voltage optimisation is one good option. Through matching supply voltage to a business’ electricity supply, businesses can expect to reduce electrical spend by between six and twelve percent with no operational changes required. With the tangible possibility of lowering energy consumption in sight - which in turn lowers costs - many businesses will be relieved that savings can be made in the face of unpredictable energy prices. Not only this, but facilities managers can also reduce their business’ carbon footprint by reducing their reliance on grid-sourced energy. With environmental awareness increasing dramatically in recent years, 2023 will prove no different and so facilities managers could look to voltage optimisation both as a means to make savings, and also as a means of meeting corporate climate ambitions on the path to net zero.

Wholesale Energy Market Woes

Though the energy market has cooled in recent months, there is no denying that the past year has greatly weakened the confidence facilities managers and businesses have in the wholesale energy market. The market has largely been defined by hyper-volatility caused by limited storage capacity within the UK, something that will continue to pose problems in 2023. As a result, it is likely that we will see a drive for efficiency in the commercial sector through more audits, a greater focus on staff behaviour relating to energy use and through energy reduction technology.

Similar to voltage optimisation in that it also reduces energy use, another measure that will be increasingly popular in 2023 is on-site solar. Through reducing grid-sourced energy, which can be expensive and volatile, facilities managers can reduce costs - plus grid-sourced energy is not currently environmentally friendly due to the bulk origin of its generation. Renewable technology such as solar panels typically offer a return on investment in just one to five years nowadays, given developments in supply chains and affordability. Onsite generation is largely low-cost and given that it produces significantly less carbon dioxide, it will become increasingly popular in 2023.

Conflict In Ukraine Fuels On-Going Energy Pressures

Last year, we witnessed Europe and the UK making huge strides in securing alternative energy supplies for the winter, ensuring that supplies were largely unaffected by the loss of Russian oil and gas. With storages being filled well ahead of time, and with extra supplies of liquefied natural gas being secured - due in part to a lower demand in Asia - energy turbulence was partly curtailed. This was further aided through investment into, and the acceleration of, projects in solar, nuclear and wind, as well as ageing coal and nuclear power plants being brought back online. Despite this, markets will remain uneasy as businesses continue to be sceptical as to whether energy support will be repeated in 2023, as well as further unpredictability caused by Russia’s actions in Ukraine. Whilst further cuts to Europe’s gas supplies by Russia seem unlikely, it remains a possibility, meaning de-escalation or an end to the conflict entirely is the only way to ensure the market returns to normality, with prices falling as a result.

Facilities managers will therefore need to stay vigilant going into 2023, with a focus on driving efficiency savings whilst also implementing the work necessary to meet their net-zero targets. In light of the above, both voltage optimisation and investing in onsite solar are two ways businesses can help to cushion potential price increases, but with effective action governments could also help to limit future risk caused by the ongoing conflict in Ukraine.