81% increase in energy bills forecast for 2021 05 December 2011

Plant managers must make long term energy management a priority, if the findings of a new research report, entitled The Energy Price Challenge, are to be believed.

According to the study – published by Power Efficiency on Friday (2 December 2011) with market analyst Waters Wye Associates – energy costs have increased by 77% since 2004 and this trend is expected to continue, with a further 81% rise forecast over the next decade.

Mark Callaway, energy markets director at Power Efficiency, argues that this indicates energy inflation by 2021 will have added £8.4 billion per annum to the fuel bill of UK commerce and the public sector combined – meaning an energy bill rise from £10.3 billion to £18.7 billion per annum.

"Both the UK public sector and business at large needs to face up to a new reality," insists Callaway.

"After a long period of deceptively low energy costs, we have emerged into an era of high and rising prices that have made effective energy management a board-level issue," he continues.

"The policy framework being put in place by government to cut emissions and improve energy supply security will also pose major challenges for UK businesses and the public sector. It is critical that organisations have energy management strategies in place now, for the next decade to protect profitability and defend budgets."

The report identifies two key drivers for price increases: rising prices for fossil fuels from international markets, combined with higher costs for implementing policies designed to reduce UK carbon emissions and improve energy supply security.

Brian Tinham

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