The Barclays Corporate Banking report, entitled ‘Powering On: Energy Resilience in UK Manufacturing’ has taken a look at the current attitudes of UK manufacturers towards energy supply and management, as well as ways the industry could reduce its energy demand. Over a quarter (27%) of those surveyed said they feel energy supply is becoming more of a concern to their business now than compared to the start of 2016.
A rise in the price of raw materials, greater competitive pressure in the sector are also having an impact – 28% of the respondents who said they are concerned about energy supply indicated that they are worried about the impact of Brexit in the coming months and years. Rising energy prices are a worry for 75% of respondents, while almost half (46%) said they would be vulnerable to the effects of significant price increases.
In the long-term, manufacturers are concerned that energy shortages will become a problem; over half said they feel these will happen in the next decade. Current contingency plans to cover power outages are insignificant, according to almost two-thirds (63%) of those surveyed.
Investing in technology is one solution to the looming crisis, with many manufacturers looking to do just that in the coming 12 months. The Barclays research has also calculated that smart investment into energy technology by manufacturers could boost the country’s economy by over £2.5 billion, as well as cutting energy consumption by nearly a third in the next decade. On top of this, if all manufacturers became as energy efficient as the market-leaders, this could create an industry worth £160bn to the wider economy by 2025.
In 2025 alone, via an improvement in cost savings, the efficiency improvement would result in the manufacturing sector using 7.9% less energy than expected – the equivalent of cutting the energy consumption of every house in the UK by 15% compared to today.
Commenting on the survey, Mike Rigby, head of manufacturing, transport and logistics at Barclays, said: “We know manufacturers are already taking steps to improve their energy resilience, from investing in energy efficiency to self-generation and partnering with resource recovery parks.
“However, our research shows that increasing this investment will not only protect the sector from future fluctuations in supply, but will also benefit the wider economy by making the sector more internationally competitive through reduced costs and increased productivity.”
