Written By: Tim Holman – Head of Consultancy, MSc, MEng, CEng, MEI
Tim leads TEAM Energy’s consultancy practice and has extensive experience supporting organisations through ESOS compliance, audits and regulatory review.
New research by UK energy company, EDF Energy, suggests UK businesses remain confident in their ability to manage energy price volatility, despite energy management becoming increasingly complex. What does this growing complexity mean for organisations trying to budget, plan and make informed energy decisions?
Energy has always been a significant consideration for businesses, but organisations are now having to manage much more than fluctuating prices.
New research from EDF highlights a possible gap between how confident UK businesses feel about managing energy and the challenges they are experiencing in practice. While 86% of businesses surveyed said they were confident they could manage energy price volatility, 74% said managing their energy supplies and costs had become more complex over the past three years.
For organisations reviewing their approach to energy management, the findings raise an important question; is confidence enough, or do businesses need greater visibility and control over their energy position?
Key Takeaways
- Energy management is becoming more complex: 74% of businesses surveyed said managing energy supplies and costs has become more complex over the past three years.
- Complexity is affecting wider business decisions: 48% said it was making budgeting more difficult, 47% reported reduced confidence in long-term planning, and 43% said it was slowing investment decisions
- Businesses want more support and flexibility, 57% want more flexible energy contracts, 53% want greater support with energy risk, and 45% want help with decarbonisation.
- Reliable data and accurate billing are increasingly important. Better visibility of consumption, costs and billing can help organisations strengthen budgeting, forecasting and reporting.
Energy Complexity is Becoming a Wider Business Issue
Energy management is no longer simply a matter of agreeing a contract and paying the resulting bills.
According to EDF’s research, wholesale price volatility remains the biggest challenge, identified by 49% of respondents. However, businesses are also dealing with increasingly complex contracts, regulatory change, emerging technologies and challenges surrounding the quality and visibility of energy data.
This complexity is beginning to affect broader business decisions. Almost half of surveyed businesses, 48%, said energy complexity was making budgeting more difficult, while 47% said it had reduced their confidence in long-term planning. A further 43% said it was slowing investment decisions.
For business energy management, this demonstrates why understanding energy costs and consumption needs to extend beyond contract renewal periods. When data is difficult to interpret or organisations lack a clear picture of what they are consuming and being charged for, it can become harder to forecast costs and make well-informed decisions.
Businesses Want Greater Support with Energy Risk
The research also indicates that many organisations recognise the need for additional flexibility and support.
More than half, 57%, said they wanted more flexible energy contracts, while 53% wanted greater support with managing energy risk and 45% wanted help with decarbonisation. Almost half, 48%, are already managing energy risk continuously rather than primarily at contract renewal.
This shift towards continuous oversight is significant. As the energy landscape becomes more complex, organisations may benefit from treating energy management as an ongoing business function rather than an activity concentrated around procurement and renewal.
Effective energy management solutions can therefore play an important role in giving organisations greater visibility of their energy position throughout the year.
Getting Greater Confidence in Energy Bills and Data
Having confidence in energy management also depends on being able to trust the information on which decisions are based.
Utility bills, consumption information, agreed rates and portfolio data all contribute to budgeting, forecasting and reporting. Yet billing discrepancies can occur. Our analysis indicates that between 3% and 4% of utility bills we handle contain errors.
This is where an Energy Bureau can provide additional oversight.
Rather than relying solely on internal teams to process and check large volumes of utility information, organisations can outsource elements such as bill validation, data management, accruals, monitoring and portfolio management. An Energy Bureau will check bills against consumption and agreed supplier rates, while also identifying, investigating and resolving anomalies in estate and billing data.
This type of support can provide another layer of assurance around the information being used for financial and energy decisions. Importantly, it can also free internal energy teams from time-consuming validation and data-management activities, allowing them to concentrate on more strategic energy and carbon priorities.
Reliable Data Enables Better Decisions
As organisations look for more effective UK energy management, data quality is likely to remain a fundamental consideration.
A business may have sophisticated procurement strategies, ambitious carbon targets or new technology planned across its estate, but reliable consumption and cost information is needed to understand performance and inform those decisions.
For organisations managing multiple sites, meters, suppliers and tariffs, establishing a consistent view of energy data can be particularly valuable. A Bureau service brings energy information from multiple locations, systems and formats into a single database, alongside bill validation and portfolio management services.
The objective is not to collect more data, it is to make existing information more reliable and useful, providing greater confidence in budgets, forecasts and reporting.
Gaining Control of Energy Bills
The findings from EDF suggest that UK organisations are not short of confidence. The challenge is ensuring that confidence is supported by the systems, processes and information needed to respond to an increasingly complicated energy landscape.
With 74% of respondents saying managing energy supplies and costs has become more complex, businesses may need to reconsider whether their existing processes provide enough visibility and oversight.
Strong business energy management does not remove energy market uncertainty. What it can do is help organisations better understand their own position.
Reliable data, accurate billing, regular monitoring and appropriate specialist support can all contribute to that picture. For organisations struggling with the administrative burden or complexity of their energy portfolio, an Energy Bureau is one option for adding greater scrutiny and structure without placing everything on the internal energy team.
Ultimately, as energy becomes more closely connected with budgeting, investment and decarbonisation, having confidence in the numbers behind those decisions will be just as important as confidence in navigating the market itself.
Discover how an Energy Bureau could help you gain more trust in the energy you are being billed for by reading our online guide.