How stable will business energy prices be in 2024?

Earlier this year, we surveyed 500 businesses and asked them about the business risks that worry them the most. Financial risk and energy security were their biggest concerns.

It’s understandable that these would rank so highly. Geopolitical tension plunged European energy markets into turmoil in 2022, causing widespread price increases. This added to the pressures already facing the global economy in the aftermath of the covid-19 pandemic.

In more recent months, energy prices have begun to stabilise. According to the International Energy Agency (IEA), in the first three quarters of 2023, spot LNG prices were 60-70% lower than their 2022 levels. But it’s not been all positive news – prices have been well above their historical averages, and the markets remained sensitive, with strong price volatility.

Some experts are predicting lower energy prices in 2024. So you might be tempted to wait and see what happens next year, before making any changes to your energy strategy. But that may not be the best tactic.

Sudden, unexpected energy price increases are becoming more and more common – and, unfortunately, market forecasts and predictions aren’t always accurate. Think back to 2019. Energy experts had their forecasts of what would happen with future energy prices – but they had no idea that we would face a global pandemic and geopolitical issues that would destabilise the market, and cause widespread price increases. Who knows what events are in our future that may impact future predictions.

Cost predictability and resilience with onsite generation

Planning for the future has never felt more difficult for most organisations. So, as uncertainty and volatility are likely to continue in the months and years ahead, how can organisations best manage their energy costs?

Onsite energy generation is one answer. By generating your own energy, instead of buying from the grid, you can be protected from a volatile energy market and get long-term predictability over your energy costs. And with a range of different financing options available, you don’t need to invest any upfront capital either:

• With our Discount Energy Purchase (DEP) financing option, you can install a new CHP or Heat Pump, and pay an agreed p/kWh unit rate for the electricity generated over the course of your 7-15 year contract.
• Or, with our Power Purchase Agreement (PPA) option, you can install a Solar PV system on your site, often on underutilised roof or ground space, or on a solar carport. You’ll pay for the electricity generated by the system over the course of a 15-25 year contract, at a kWh price typically lower than grid pricing.
• Alternatively, we can combine these financing arrangements, if you’re looking for a complete energy solution that encompasses multiple technologies – CHP, Heat Pumps, Solar PV, and more.

No matter which financing option you opt for, you’ll also have the option to bundle operations and maintenance into the same contract - simplifying your energy strategy and ensuring your onsite energy generation solution operates at its best.

Limit your exposure to energy market volatility

Looking ahead, the only certainty is uncertainty. If your organisation doesn’t act now to improve your resilience, you will be vulnerable to current and future turmoil. You could face price fluctuations, supply chain disruptions, and a lack of energy independence that could limit your decarbonisation plans.

Financed, onsite energy generation solutions provide a way for you to limit your exposure to this market volatility. Doing nothing is not a viable option. No organisation can afford to wait.

If you’re interested in learning more about how onsite energy generation solutions could support your organisation, get in touch with our energy experts today.