Energy prices soar above inflation

Over 25% were hit by jumps of 10% or more in prices, according to our survey of 101 site managers. One in five paid an extra 5-10% on utilities, with electricity responsible for the biggest cost rises, the report revealed. Over 30% said continuing price rises in 2012 will be propped up by reduced operating profits. And one respondent admitted job cuts could be made unless prices ease. The data was branded "hugely concerning" by manufacturing managers. Haydn Pike, site energy manager at Norgine, commented: "The rise in energy costs just makes us anti-competitive as a nation. That's unsustainable...I speak to colleagues in France who just don't face the same serious fluctuations we do." Over 40% of respondents branded government energy policy "punitive". Two thirds said they had seen no change in strategy from the previous administration. Site managers called for ministers to "stop moving the goalposts" through inconsistent energy policy. "The government must be more consistent and stick to their decisions," one respondent said. "We need anything that gives us a stable, predictable situation -- that means the coalition have to do whatever they can to buffer industry against any rise in energy (effectively running) costs." Manufacturers also called for extra incentives to help them improve energy efficiency. Top requests included extended capital allowances to fund new equipment and tax breaks for hitting energy targets. Despite the backdrop of energy price rises, 25% of respondents said they had reduced bills. The savings were largely down to heightened energy efficiency programmes, the report found. Four in ten sites plan to reduce energy use by more than 5% this year, according to the report. Over 60% now have a nominated energy champion to lead their efficiency bid. See WM March issue for the full findings of the 2012 Energy Report.