From hairdressers to manufacturing plants, businesses that power our economy need to be able to easily access the opportunities to help them invest to reduce energy bills and lower carbon emissions – whether that’s from generating renewable electricity on-site, better insulated buildings, switching from gas boilers to more efficient heat pumps or even getting paid to shift electricity demand.
Energy UK members Centrica, CWP Energy, Drax, EDF, ENGIE, E.ON, ESB, SSE and Octopus Energy are just some of the companies working to support businesses through the transition.
Compared to other countries that are less reliant on gas, UK businesses have been penalised with higher energy costs following unprecedented volatility in gas prices internationally. Lowering energy costs for businesses not only means customers will benefit from cheaper products and services, it also boosts global competitiveness for UK companies. Alongside this, it’s also important businesses are confident in the energy sector and know how to engage with it.
Some of these concepts, such as frequency response, have been in place for years. But as the UK moves towards a more renewables-based system there will be an increasing number of opportunities for businesses to benefit from flexibility services. Businesses can also benefit from investing in new renewable projects to secure long-term electricity prices and help accelerate the move to a zero-carbon electricity grid.
Businesses are also under increasing pressure to report emissions and demonstrate their own environmental credentials. Just as with the wider economy; tackling power and energy in the first instance can reap significant gains.
Reducing energy bills through efficiency and new forms of heating
Energy efficiency improvements allow businesses to use less energy while maintaining the same level of production or service delivery, leading to lower monthly bills. However, research from the Federation of Small Businesses (FSB) found that 33% of small and medium enterprises (SMEs) were yet to take steps to reduce their energy usage, with 24% citing an uncertain return on investment, and 22% a lack of capital.1
Even during a period of high energy costs where payback periods are much shorter, it’s clear that the upfront cost to installing energy efficiency is still seen as a barrier for some businesses. Energy UK members ESB and E.ON have been working with organisations across the UK to address this.
Accord Healthcare’s 22-acre site in Newcastle focuses on packaging, formulation, sterile facilities, and warehousing, with recent investment in energy optimisation. Working with Centrica Business Solutions the business installed a combined heat and power (CHP) unit to improve its energy efficiency and reduce costs. The CHP is expected to provide 80-90% of the site’s electricity, delivering a 10% cost saving under a five-year agreement, with further savings anticipated afterward.2
E.ON worked with Lendlese, an international real estate group, on the Silvertown redevelopment project in East London’s Royal Docks. The implementation of the Ectogrid system at Silvertown, which connects more than 6,000 new energy efficient homes and business properties to low carbon heat and cooling network, is projected to save about 4,000 tonnes of CO2 a year – a staggering 88% lower emissions compared to traditional gas boilers.3
Over in Ireland, ESB’s Smart Energy Services led a project to transition more than 4,000 indoor and outdoor lights to state-of-the-art LED bulbs at Shannon Airport, resulting in a significant 66% reduction in energy consumption. Spanning terminal buildings, car parks, and airside areas, the upgrade included replacing existing lights with LED counterparts, including emergency lighting and lighting controls to minimise running and maintenance costs.4
Decarbonising heating is especially important for the hospitality sector, including restaurants and pubs, as it can significantly lower carbon emissions and energy costs.
Vital Direct works with the energy industry to offer businesses energy efficiency and Energy Performance Certificate advice tailored to each business. Working with a local 17th-century, grade-two listed pub, Vital Direct installed a heat pump, electric point-of-use water heaters, and LED lighting to help create a net-zero carbon-emitting pub. These upgrades significantly lower operating costs and ensure the pub’s long-term sustainability, in addition to contributing to a net-zero carbon footprint.5
Innovation in flexibility
Innovative, flexible tariffs can support businesses by offering lower rates during off-peak hours or when renewable energy is more abundant. This not only benefits the business but also helps reduce overall system costs, too.
Using smart technologies can help businesses become more aware of their energy usage and enables them to access new tariffs – and in some cases, be rewarded for moving electricity use outside peak times.
Drax, SSE and Octopus Energy are just a few of the companies incentivising customers to shift their demand, saving them money but also helping to manage the UK’s changing, flexible electricity system.
SSE offers fixed time-of-use tariffs that enable businesses to pay separate day, evening and weekend rates, and a bespoke tariff for businesses with electric vehicle fleets. Meanwhile, Octopus Energy has created two different tariffs for businesses depending on their size and needs.
For smaller businesses, Octopus has introduced ‘Shape Shifters’ – a tariff designed to help small businesses take control of their energy by shifting their usage. Research from Octopus reveals that businesses on the tariff trial saved an average 12% on their energy bills by using energy during off-peak periods.6
For larger businesses, Octopus offers ‘Electric Match’, a time-matched product that enables businesses to be powered by specific renewable generators across the country or from their own renewable assets on their different sites. Businesses that shift their electricity use to match output from the renewable source then receive reduced bills while also being able to see exactly when and where the energy comes from.
The industry is also supporting businesses in finding new ways to reduce electricity costs and carbon emissions through demand-side response (DSR) markets.
For example, Drax is involved in national programmes such as the Demand Flexibility Service (DFS) and has developed its own ElectriFlex scheme. These programmes reward businesses for reducing their energy use during peak times or for optimising how electric vehicle chargers are used. By participating in these flexibility markets, companies can both lower their electricity bills and support the transition to greener energy.
Alongside this, Drax collaborated closely with Sundown Products – an agricultural business from Cambridgeshire– to conduct a comprehensive review of its energy needs. By analysing its half-hourly energy usage data and consulting with on-site engineers, Drax was able to recommend solutions focused on energy trading and providing services to the grid operator to keep the system stable, helping to reduce its costs by £35,000 since the partnership began in 2021.7
Investing in renewable projects
Achieving a clean power system by 2030 and Net Zero by 2050 requires an unprecedented buildout of low-carbon generation. The UK has made great strides in the building of renewable energy infrastructure, thanks to policy mechanisms such as Contracts for Difference (CfDs) that give investors certainty and drive down costs.
However, not all projects are suitable for CfDs. Energy companies are able to provide routes to market for small-scale renewable projects while supporting businesses with their bills. Energy UK member ENGIE has partnered with Arla Foods and Infinis to develop two new solar farms that will provide around 20% of the energy needed to power the company’s UK operation. The completion of the farms has seen Arla cut both costs and carbon across the business.8
Likewise, EDF has signed a new agreement with Tesco to source 150GWh of power annually from a new wind farm in Dumfries and Galloway. Once operational, this wind farm will generate enough renewable electricity to power the equivalent of over 80 average-sized supermarkets for an entire year, significantly contributing to Tesco’s sustainability goals and the wider transition to green energy. This partnership marks a key step in both companies’ commitment to reducing carbon emissions and supporting the UK’s renewable energy landscape.9
Alongside this, Energy UK members CWP Energy and EDF have worked together to support local distilleries across Scotland. The partnership will see Edrington, a premium Scottish distillery group, being powered by CWP Energy’s Wardlaw Wood Wind Farm. The power will more than 100% of the electricity consumption used by the distilleries throughout the four-year deal, helping Edrington to achieve its carbon emission reduction ambitions.10
Additionally, SSE has partnered with Ortus Energy to finance rooftop solar installations for industrial and commercial businesses, allowing companies to pay for the energy produced over a long-term power purchase agreement.11
Energy in action
Supporting businesses to reduce energy costs, retain competitiveness and meet their own environmental targets is a critical part of the transition to a Net Zero economy, and energy companies are playing a pivotal role in driving this change. As businesses embrace these opportunities, they will help shape a more sustainable, energy-efficient future for both themselves and the broader economy.
These case studies are just a few examples of the ways energy companies have supported businesses, but there are many more examples of how the energy transition benefits people across the country. If you have a case study showcasing your efforts to decarbonise homes, transport or businesses across the UK, please get in touch via press@energy-uk.org.uk.
‘Energy Matters’ is a proposal for partnership to unlock investment, transform the economy and deliver change.
3. E.ON Next, Our ecogrid is the talk of the (Silver)town.
5. Vital Direct, Revitalising a Historic Pub with Sustainable Solutions.
7. Drax (2021) Delivering guaranteed savings through flexibility for Sundown Products.
8. Arla Foods (2023) Arla to power UK operations with two new solar parks.
10. EDF (2021) Matching Scotch Whisky distilleries to a local renewable energy source.
11. Ortus Energy, SSE Energy Solutions Partners with Ortus Energy.
