Energy production drop - what businesses should know

Article posted

12th Feb 2024

Read time

2-4 min read


Mollie Pinnington

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A recent report by the Department for Energy Security and Net Zero has shown a 9.4% drop in UK energy production.  While the overall impact remains to be seen, one thing is clear: businesses need to be prepared for potential disruptions and rising energy costs.

What are the causes of the drop?

The decline, reported in January 2024, affects all major fuel sources except coal, bioenergy, and waste. Several factors are at play:

  • Reduced gas generation: A 25% decrease in gas-fired power stations is linked to global market volatility and high gas prices.
  • Nuclear maintenance: Scheduled outages at nuclear power plants contributed to a 1% dip in production.
  • Wind power dip: Unfavourable weather conditions impacted wind energy generation.


What does this mean for businesses?

While the immediate impact might be minimal, several potential consequences loom:

  • Higher energy bills: Increased pressure on the grid could lead to rising wholesale energy prices, translating to higher bills for businesses.
  • Supply disruptions: In extreme scenarios, grid instability could trigger temporary blackouts or brownouts, disrupting operations.
  • Policy changes: The government might implement measures to stabilize the grid, potentially impacting energy policy and regulations.


How can businesses prepare?

Proactive steps can help businesses mitigate the impact:

  • Review energy contracts: Assess current contracts for flexibility and renegotiate, if possible, to secure better rates. Speaking with an energy consultant could help your business through times of energy uncertainty, why not get in touch today!
  • Improve energy efficiency: Implement energy-saving measures like LED lighting, smart thermostats, and efficient equipment to reduce consumption.
  • Explore renewable options: Consider investing in on-site renewables like solar panels or exploring power purchase agreements with renewable energy providers.
  • Stay informed: Monitor industry news and government updates to stay ahead of developments and adapt strategies accordingly.

The road ahead: uncertainty and opportunity

The 9.4% drop in energy production serves as a wake-up call. While challenges are evident, they also present opportunities for businesses to become more energy-resilient and sustainable. By taking proactive steps, businesses can navigate this period of uncertainty and emerge stronger, prepared for the future of energy in the UK.

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