Jul 04 - Datamonitor

The latest energy index report from RWE's UK arm, npower, shows that an increasing number of businesses are now implementing measures to improve energy efficiency. However, the company warns that businesses on the whole are still focusing too much on short-term planning when it comes to energy management.

The main findings of the npower-sponsored report reveal that businesses believe continued volatility in UK wholesale energy cost is fuelled by global fossil fuel prices and is continuing to impact on businesses of all sizes. This has resulted in businesses rating the importance of energy efficiency higher than ever, with 76% of respondents claiming to have taken steps to improve energy efficiency over the last six months. This compared to 70% of all respondents in the last index, published in December 2005.

The figures also suggest that major energy users (MEUs) are far more likely to implement such measures, with 83% of MEUs claiming to have taken steps towards improving energy efficiency compared with 60% of small and medium enterprises (SMEs.) The report also showed that the most popular measures implemented by businesses were to change heating and lighting systems in order to improve efficiency.

However, the study also provided significant evidence to support the fact that companies are not adopting a long-term strategy when it comes to energy management and, are instead, opting for solutions that require less time and investment. This appears to be mainly due to economic barriers and concerns about what the short-term impact more significant measures would have on the balance sheets. As a result, companies are missing out on massive potential savings that could bring substantial long-term improvements to their bottom line.

And, with 73% of respondents claiming that rising energy costs are continuing to have a negative impact on profitability and businesses predicting a rise in energy costs of 22% over the next three years, it is clear that this attitude towards energy management has to change, npower says.

Gordon Parsons, managing director of npower's business customer arm, commented: "Today's report shows that there is a tendency for UK businesses to only consider short-term energy management rather than taking a 'cradle to grave' approach which, in the long run, would more effectively reduce energy consumption and cost."