With electricity costing more than an arm and a leg in the United Kingdom, businesses have had to make major changes with the amount of energy they use to cut costs and start saving.
But how does a business make a change that could potentially affect the sustainability of their company going forward? They would have to assess their energy consumption and make changes that are beneficial to both their consumers and their business.
For more information on how much energy businesses have used in the last year, let’s look at the factors that contribute to business energy usage in the UK.
What Are The Factors That Contribute to Business Energy Usage?
There are many contributing factors to the consumption of the energy usage of your business.
There are internal and external factors.
Internal factors include:
- Business Size
Smaller businesses tend to use less energy when compared to large businesses. However, despite the size of your business, there are always options of applying to government schemes to help minimise the costs or try to find a cheaper utility provider.
- Business Type
If your business uses a lot of machinery then the energy consumption will be higher than a business that provides a service.
- Business Location
Depending where your business is located, certain areas have a higher electricity rate than others.This should be taken into account when you are trying to find a business location or consider moving to a cheaper area that would still benefit your business.
External factors include:
- Energy Type
The energy type refers to natural gas, renewable energy, or electricity. These prices are also dependent on the time of the year as in winter gas prices are higher than when in summer especially if you use it for heating your business.
- Market Price of Energy
Factors such as the weather, war, import and export tariffs can affect the price of energy. This creates an irregularity as the market price of energy will increase and decrease depending on external factors.
- Government Regulations
The UK government has regulated the usage of electricity and businesses need to comply with these policies.
These policies are put in place to protect the consumer from paying too much for electricity but at the same time can interfere with company profits as at times the cost for electricity can be higher depending on the regulation set out.
How Much Energy Does UK Businesses Use?
To determine how much energy your business uses you need to first take into account the size of your business.
Businesses can either be micro, small or medium. On average according to these estimates done in 2018, the energy and gas bill could accumulate to:
Average Electricity Bill:
- Micro business: 5000-15 000 kWh per year (£650-£1 800)
- Small business: 15 000-30 000 kWh per year (£1 900- £2 900)
- Medium business: 30 000- 50 000 KWh per year (£3 300- £5 000)
Average Gas Bill:
- Micro business: 10 000 kWh per year (£560)
- Small business: 25 000 kWh per year (£965)
- Medium business: 45 000 kWh per year (£1 502)
Although there seems to be a decline in electricity usage within the UK, it still remains one of the countries that ranks among the highest consumption.
In 2020, on average it has been registered that for a person in the UK, 4 500 kilowatt-hours per person is used when compared to other countries such as Norway and Germany.
Reasons for reduction in Energy Consumption of UK Businesses
The reason UK businesses have not been using as much energy as they did before the energy crisis is the introduction to renewable energy.
Governments have now implemented policies that encourage and enforce the use of renewable energy to reduce energy consumption, as well as having both households and businesses practice saving energy to cut costs and make a switch to other practices that are energy efficient.
However, although electricity has been used less, the use of renewable energy has increased.
Conclusion
It is important that businesses cut the amount of energy that they are using to ensure that they are within UK government regulations firstly and secondly to save on costs.
It is also good for the environment to make sure that companies are not wasting resources and switching to safer energy options such as renewable energies.
This also helps businesses stay within the market as they will attract more customers without having to raise the prices of their goods or services to help combat energy prices.
