Manufacturing businesses are heavily focussed on flexible generation and distribution alongside decarbonisation of their energy use in the wake of the pandemic. This is according to key findings from Aggreko’s latest manufacturing report of Q2 2021, which surveyed over 200 decision makers from large UK manufacturing companies.
In light of the uncertainty surrounding energy systems caused by the pandemic, Aggreko commissioned new research by global research company, Censuswide, to gain an understanding of the potential need for more flexible energy models to support the UK manufacturing sector. Energy in Manufacturing: A Flexible Future? delves into changing energy perceptions and behaviours since 2020.
According to the research, an overwhelming 90% of manufacturers now want more flexibility and control when using onsite or decentralised energy sources.
According to Chris Rason, Managing Director of Aggreko UK, businesses are presently concerned about their ability to drive investment and output at a time when recovery and growth is paramount. He says: “We invest significantly into market insights in order to truly understand our role in aiding the energy transition for companies across the world. This particular piece of research has revealed some overwhelming statistics highlighting a clear need to challenge conventional methods of energy generation and distribution in a sector clearly under strain.”
With this in mind, since 2020 respondents agreed that their business is feeling under increased pressure to decarbonise (82%); lower energy costs (79%); secure energy supply (82%).
Also, 79% of firms have felt increasingly pressured to decentralise their energy supply and reduce associated costs since 2020. This was highlighted by the fact a resounding 80% of respondents said they are now more likely to outsource a distributed energy contract.
Distributed energy models like ‘Energy as a Service’ (EaaS) agreements seem to be a popular solution going forward in this difficult period, with 97% of manufacturers surveyed preferring to control their energy supply without the valuable cost of capex. However, Chris Rason explains that companies face limitations with traditional models, as many involve committing to long-term contracts. He says: “Conventional EaaS agreements can often span up to 15 years. Given the current uncertainty, businesses may be reluctant to oblige to such lengthy tie-in periods. Furthermore, they may be unable to take advantage of new, more efficient technologies that arise over the duration.”
In response to the survey findings, Aggreko is campaigning for manufacturers to challenge their conventional methods of energy management. For example, hiring EaaS is one business model Aggreko has evolved over the years, which allows businesses to distribute and decarbonise energy without fixed energy pricing and committing to long-term contracts. The service is also be modular, meaning manufacturers can scale up and down according to demand.
Chris concludes, “This report highlights a need for more flexible energy arrangements in order to give businesses a pragmatic way to manage their energy requirements and sustainable access to the latest technology, without the burden of long-term commitments. By removing the concern of lengthy commitments and outdated technology, the UK manufacturing sector may well be better equipped to accomplish a post-pandemic recovery. This is something that we have been advocating for some time, and excited to unveil our latest proposition in due course.”