As fossil energy prices remain low, investing savings now for future security remains a sensible move.
Energy prices tracked by the Lorien Energy Index (LEI) between the first quarter of 2015 and the last of 2014 fell by approximately 3%, sitting 4% lower than the same period the previous year.
With an increasingly complex economic outlook suggesting fossil energy prices may yet fall further, Burton based Lorien Engineering Solutions has reiterated its advice that businesses should be wary of complacency when it comes to managing bought-in energy.
The Lorien Energy Index monitors the overall cost of energy for business users. It enables companies of all sizes to make sense of their current energy consumption and look at ways they can make savings in the future, by being energy efficient and utilising low carbon and renewable technologies to boost energy security.
Energy prices remain firmly on a downward trend, pushed by oversupply caused by falling demand and increased levels of production. Brent crude sits 57pc lower than 12 months ago at $43 a barrel. There are industry concerns that current prices are not sustainable and that once demand flips to an upcycle, lower overall levels of investment may result in a price shock over the medium to longer term. In the short term, record supplies of natural gas from Norway and Russia are reducing the potential for pricing spikes during the winter period across Europe, aiding market stability.
Lorien’s sustainability consultant Tom Jordan said: “Managing the bought-in cost of energy has long been a black art for many businesses. With the UK’s Energy Saving Opportunity Scheme (ESOS), many firms are putting in place the first piece of the puzzle in identifying their significant areas of energy use. With a mandatory report submission due this December, energy reduction and resilience planning should now have a firm place at board level to highlight the opportunities and business advantages of energy efficiency and renewables.”
He concluded: “From December, the next step will be to make plans and implement projects. With savings being recognised from lower fossil energy costs, investing now against an upcycle in costs is a sensible move and will encourage business resilience.”