Why are companies still
exposed to energy prices?
Companies remain
exposed to energy prices because, for too long, they have treated energy as a
cost to negotiate rather than a strategic resource to manage.
Negotiating better
contracts may reduce the price at a particular moment. However, it does not
eliminate exposure to market volatility, consumption peaks, changing tariffs,
regulation or grid dependency.
The real question is
not what the next energy price will be. It is how companies can reduce the
share of their energy consumption and the associated risk, that remains in the
hands of the market.
This exposure is
largely driven by five factors.
1. They continue to
purchase almost all their energy from the grid
As long as a company
relies on the grid to meet most of its energy needs, it will remain exposed to
wholesale market developments, tariffs, taxes and wider energy system costs.
A more competitive
contract may improve purchasing conditions, but it does not change this
structural dependency.
The objective does not
have to be complete independence from the grid. It should be to reduce
dependency and gain greater control over where energy comes from, how much it
costs and when it is used.
2. They confuse
fixed prices with the absence of risk
Fixing an energy price
can increase predictability and temporarily reduce exposure to market
fluctuations. However, it does not eliminate risk.
The agreed price
already incorporates market expectations, risk premiums and the supplier’s
commercial conditions. Moreover, every contract eventually expires. When the
time comes to renew it, the company is once again exposed to the market
conditions prevailing at that moment.
Contractual
predictability is not the same as energy control.
3. They manage the
price, but not the consumption profile
An energy bill does
not depend solely on the price per kWh. It also depends on:
- How much energy is consumed;
- When it is consumed;
- How much capacity is required;
- When consumption peaks occur;
- How much consumption can be shifted or
made flexible.
Two companies with the
same annual energy consumption can have very different costs and levels of
exposure.
Without data,
monitoring and active energy management, a significant part of the company’s
energy risk remains invisible and therefore unmanaged.
4. They implement
isolated solutions
Installing solar
panels is important, but it may not be enough. If energy is generated when
consumption is low, part of its potential value is lost. If the company’s
consumption peaks occur outside solar generation hours, it will remain
dependent on the grid during those periods.
Reducing exposure
requires an integrated approach that combines, where appropriate:
- Solar self-consumption;
- Energy storage;
- Energy efficiency;
- Electrification;
- Energy management and monitoring;
- Flexibility;
- Long-term energy contracts.
The value lies not
only in each individual technology, but in how they work together according to
the company’s consumption profile and strategic objectives.
5. Energy is still
not part of the business strategy
In many organisations,
energy responsibilities remain fragmented across procurement, operations,
finance, maintenance and sustainability. Each department sees part of the
challenge, but no one manages energy exposure as a whole.
However, energy
directly affects:
- Operating costs;
- Competitiveness;
- Business continuity;
- Decarbonisation targets;
- Investment capacity;
- The value and resilience of assets.
When energy is not
part of the strategic agenda, decisions tend to be reactive, fragmented and
focused on the short term.
How Can Helexia
Help?
Companies do not need
to predict the market’s next move with absolute accuracy. They need to reduce
their dependency on it.
This means consuming
less, generating energy locally, storing surplus energy, using energy when it
creates the most value and continuously managing the performance of energy
assets.
The energy transition
therefore becomes more than a response to volatility. It becomes a strategy to
increase control, protect competitiveness and transform energy into value.
Contact us to
discover how your company can reduce its exposure to energy risk.
