The UK’s energy crisis is continuing to have a devastating financial impact on businesses. However, often overlooked are those ancillary businesses, such as energy consultancies and third-party intermediaries (TPIs), who act as an essential point of contact between business consumers and energy suppliers.
In the past two weeks the North East alone has seen 600 energy consultant jobs lost, with many more at risk, warns Gateshead Quays based energy consultancy, Northern Gas and Power (NGP).
Consultants and TPIs are the most common way that businesses engage in the route to market, with almost 70% of UK businesses relying on their professional services for energy procurement. Consultants play a vital role in the industry, providing a valuable service for businesses to gain access to the market, and driving both increased competition between suppliers and better pricing, and helping businesses navigate an ever evolving and increasingly complicated energy market.
Across the UK, 10,000 energy consultants help businesses manage their energy contracts, costs, and consumption, providing professional advice and invaluable knowledge on market complexities.
NGP’s energy consultants have been supporting UK businesses to navigate the unprecedented challenges of the energy crisis, identifying energy procurement opportunities, helping secure their budgets and giving them resilience in a volatile market. NGP currently supports over 18,000 clients.
However, rising costs have led to a lack of trading and liquidity in the market, meaning suppliers have been unable to provide energy contracts for all types of businesses over recent months. This, compounded by a lack of clarity in government strategy, or any intervention, has resulted in significant job losses across the TPI industry.
Businesses are struggling to cope with soaring energy costs and inflation, and with a lack of trading and liquidity, TPIs are struggling to access the competitive deals that businesses rely upon – leaving many TPIs at an operational standstill. The impact is being felt in the TPI sector right across the UK, but particularly in the North East, a part of the UK already disproportionately impacted by rising unemployment, at 5.2% – the highest region nationally (the national average is 3.8%).
Energy consultants and TPIs stimulate the energy market, offering competition and innovation in the sector as they negotiate improved rates with suppliers on behalf of businesses. This active competition and innovation is key to driving the digital transformation of the industry – without which the whole sector will be left decades behind, further exacerbating fears about the security of supply.
As well as driving down energy costs for companies, energy consultants and TPIs also provide innovation in energy management and green technologies to help businesses reduce their consumption, and therefore their costs and carbon. The importance of TPIs and brokers in this market cannot be stressed highly enough.
The loss of energy consultants will have long term repercussions, as there is not only in an exodus of vital expertise from the industry, but also a long-term negative impact across the North East’s regional economy, which as a region is a major employer of consultants.
A spokesperson for NGP commented; “If this lack of Government intervention continues, it could set the North East’s economy back decades, effectively killing off much of the expertise, innovation and competition in the market that has not only benefited businesses in the North East, but right across the country.”
NGP is therefore urging the Government to address the situation in its emergency budget through the following measures:
- Support vital jobs in the Energy Consultancy sector.
- Devise and roll out a plan that will help energy consultancies navigate the crisis over the winter period and into 2023, to ensure they can continue to provide crucial support.
The NGP spokesperson continued: “Energy consultants bring many benefits, offering a more efficient route to market, stimulating competition, and driving down costs.
“The overall sentiment in the TPI industry is that we are being left without any direct support, which will ultimately lead to thousands of job losses – effectively killing off competition within the energy market.
“It’s important to acknowledge the vital role that TPIs fulfil in the energy market. This is a real levelling up opportunity for the new business secretary and we urge the government to take action now before it is too late.”