New report shows importance of increasing the energy resilience of the manufacturing sector in the UK

Jo Barnes provides a good article on the FreePress website about a recent report that shows importance of improving the energy resilience of manufacturers. One assumes this need to improve energy resilience goes well beyond British shores.


Welsh manufacturers could cut energy use and boost economy by investing in energy tech manufacturing

UK manufacturers could inject an additional £2.56bn into the UK economy, cut energy consumption by nearly a third and boost their energy resilience by increasing investment in energy technology over the course of the next decade, finds a new report by Barclays.

The research shows a growing concern about the availability, reliability and cost of energy with more than half of Welsh manufacturers surveyed (50 per cent) saying that energy supply is more of a concern to their business now than at the start of 2016.

This compares to 27 per cent at the national level.

These concerns have come to the fore as manufacturers feel squeezed by increases in the price of other raw materials, greater competitive pressure in the sector, and concern over the eventual impact of the UK leaving the European Union.

The Barclays Corporate Banking Powering On: Energy Resilience in UK Manufacturing report examines current attitudes of UK manufacturers towards energy supply and management and models how manufacturers could reduce their energy demand.

Simon Vittle, manufacturing sector specialist for Barclays in Wales, said: “Energy resilience and costs are vital considerations for manufacturers across the region and we know manufacturers are taking steps to improve their energy resilience, from investing in energy efficiency to self-generation and partnering with resource recovery parks.

“Our research shows that working to increase this investment will not only help shield against future changes to the energy supply, but will also benefit the wider economy by making the sector more competitive through reduced costs and increased productivity.”

Chief among manufacturers’ concerns are energy prices, with 92 per cent of Welsh manufacturers citing this as a worry, compared to 75 per cent at a national level.

And 17 per cent of manufacturers in the region also believe that they are vulnerable to the effects of significant energy price increases, and of these 58 per cent believe that they are very vulnerable.

Longer term, the region’s manufacturers are concerned that energy shortages will occur, with 58 per cent expecting these in the next ten years. Most of the sector (83 per cent) believes that they are vulnerable to energy shortages, arguing that current preparations are likely to be insufficient, compared to 63 per cent at a national level.

Manufacturers across Wales are already investing time and money in a variety of energy management technologies and approaches, or planning to in the next 12 months, with energy efficiency measures (58 per cent), negotiating lengthier energy supplier contracts (17 per cent) material efficiency (17 per cent) and self-generation (25 per cent) measures topping the list.

The Barclays research reveals that if all manufacturers became as energy efficient as the leaders in the sector, this could create an industry worth £160bn to the wider economy by 2025.

This represents an increase of 5.1 per cent in value terms compared to 2015, and a £306m increase on the projected value of the manufacturing sector if it were to remain on its current trajectory, without improvement in energy efficiency.

This extra economic output will be achieved by the sector cutting costs and improving its international competitive position, but only if the sector can develop the leadership commitment and resources required.

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