Three in five businesses concerned energy costs are undermining growth plans

New research from EY. has found that whilst the majority of companies say they have energy-related strategies and targets in place with three in five (62%) say the volatility of costs is already impacting profitability and competitiveness, with 66% concerned about the availability and reliability of energy supply to meet their future needs.

The latest EY Navigating the Energy Transition research surveyed more than 2,400 mid-to-large company decision-makers globally, including 314 based in the UK. The findings also revealed that over two-thirds (69%) of UK businesses are planning to increase time and investment spent on electrifying operations, lowering emissions and reducing energy costs in the next three years.

Seventy per cent of UK companies say they have a comprehensive energy strategy and 86% aim to meet their energy-related targets, such as electrification or cutting emissions and energy costs, by 2040. However, challenges around financing and cost (44%), complex regulation and availability of utilities infrastructure (both 35%) are cited as the top barriers UK businesses currently face when implementing energy strategies and investments.

The role that businesses expect energy providers to play is also evolving, with 44% saying they want providers to act as energy transition advocates in the future, compared to 24% who say they simply want a core energy operator.

As expectations shift and demand continues to rise, with 81% of UK companies expecting their electricity consumption to increase in the next three years, they are also looking for their energy providers to deliver more intelligent, tailored solutions and digital tools – including artificial intelligence, which more than two-thirds of businesses (68%) want integrated into their energy experience and interactions.

Colm Devine, Power and Utilities sector leader at EY, said “Energy is clearly no longer just a commodity, it’s a competitive and strategic asset which is likely to continue to be subject to significant change and investment over the coming years. Providers that engage in the right mix of expertise, insight and collaboration will be the ones that businesses choose to help them in unlocking long-term growth.

“This support will not only drive value for businesses and accelerate growth, it can help shape a more sustainable UK economy fit for the future. The stakes are high, but so is the opportunity, and the message from businesses is clear. The importance of providers engaging with business customers in new ways and rethinking their role in the energy ecosystem cannot be underestimated.”