Despite wholesale costs falling rapidly, experts forecast that energy prices will still remain significantly higher than businesses are used to during the 2020s, so manufacturers cannot rest on their laurels.
According to the latest predictions by energy consultancy Cornwall Insight, power prices are due to continue falling over the next three years but will likely level out at more than twice the levels seen before the energy crisis began in 2021.
The continuation of high prices over the next few years is due to a range of factors, including an expected increase in power being exported to Europe and rising demand due to the switch to electric vehicles and heating.
Although the wholesale element of business energy bills is falling, other costs added to bills – such as network charges – are also expected to rise in the short-term.
Tom Edwards, Senior Modeller at Cornwall Insight, commented:
“The outlook suggests that we have come through the worst of the current energy crisis and that the exceptionally high prices seen over the past two years will continue to fall. However, the market is finely balanced and consequently susceptible to price shocks arising from any unforeseen circumstances.
“In the long run, electrification of the economy, amongst other factors, is predicted to raise the demand for renewable power, driving up price forecasts in the process.”
The news means that manufacturers should not rest on their laurels when it comes to taking measures to improve their energy efficiency. Although some of the most energy-intensive firms can now access new government-funded energy bill discounts until 31 March 2024, most businesses will no longer be receiving any government support.
SME manufacturers in Lancashire can access expert advice to help reduce their energy consumption, including:
- Our expert Manufacturing Service can also provide tailored one-to-one support to take costs out of your business through lean measures to improve your productivity and profitability
- A set of introductory energy saving guides and recorded webinars are also available via our #HereForBusiness campaign.
For more information on the support available, contact one of our Manufacturing Advisors today.