UK execs voice fears over energy crunch

Over 80 per cent of British firms expect energy and fuel prices to rise sharply, with nearly half expressing fears that the UK could face serious energy supply shortages within five years.

That is the conclusion of a new survey of more than 210 executives carried out by the Economist Intelligence Unit, which revealed growing interest in smart meter and microgeneration technologies as a means of mitigating against rising energy bills.

The energy industry has been warning for some time that the need to invest in new low carbon energy generation infrastructure, combined with an anticipated increase in the cost of carbon through the EU emissions trading scheme and growing global energy insecurity, will mean that energy prices will rise well above inflation over the next decade.

The new survey of senior executives from the British public and private sector reveals that this message is getting through, with more than half of those surveyed insisting that the government should treat energy security as its top business priority over the next five years.

The report, which was commissioned by telco giant T-Systems, also revealed that large numbers of companies are taking action to guard against rising energy prices.

Seven out of 10 respondents said that they have either deployed or are in the process of deploying smart meter technologies in an attempt to monitor and reduce their energy usage, while interest in microgeneration technologies is growing rapidly in the wake of the recent introduction of the government's feed-in tariff incentive scheme.

Although only 13 per cent of respondents said that their company currently uses microgeneration systems such as solar panels or small-scale wind turbines, 42 per cent said they have plans in place to deploy the technology.

Moreover, nine out of 10 respondents said they have a concrete energy efficiency target in place for this year, with the majority planning sizeable improvements of up to 10 per cent.

"The research highlights that energy is now a major business risk for UK businesses," said Sam Kingston, managing director for T-Systems in the UK, adding that energy security was now established as a board level issue at many firms. "In the near future, access to energy and its careful management will be as critical to business success as, for instance, access to capital and management of capital is today."