How large manufacturers can reduce energy costs this summer
Summer might not feel like the obvious time to think about energy costs — but for large manufacturers, it’s one of the best windows of opportunity in the year. Forward prices are available at relatively competitive levels before autumn volatility typically sets in, and there are practical steps you can take right now to reduce both your procurement costs and your day-to-day consumption.
Here’s what to focus on.
Procurement & contracts
The single biggest lever most manufacturers have is the contract they’re on — and many businesses don’t review it until it’s too late.
- Check your contract expiry date. Rolling onto a supplier’s deemed rate is one of the most expensive mistakes a business can make. Know when your contract ends and act well in advance.
- Approach the market now. Summer is typically a better time to fix forward prices than autumn, when seasonal demand concerns and geopolitical uncertainty tend to push prices higher.
- Consider a flexible procurement strategy. Rather than fixing everything in one go, a multi-purchase approach lets you take advantage of price dips over time.
- Use an independent broker. An experienced energy consultant can compare the full market on your behalf and identify terms you won’t find by going directly to a single supplier.
- Align contract renewals across all your sites. Consolidating renewal dates gives you more negotiating leverage and simplifies your energy management.
Demand management
You don’t always need to use less energy — sometimes you just need to use it at the right time.
- Shift intensive processes to off-peak hours. Running energy-heavy operations overnight or at weekends can reduce both commodity costs and network charges significantly.
- Avoid the evening peak. The window between 16:00 and 19:00 is when grid demand is highest. Staying off during this period reduces your exposure to Triad and DUoS charges.
- Review your maximum demand figure. If your agreed capacity is higher than you actually need, you’re paying for headroom you’re not using. Get your readings checked.
- Explore demand-side response. Grid operators will sometimes pay businesses to reduce load at short notice. If your processes allow flexibility, this can become a revenue stream.
Efficiency & monitoring
You can’t manage what you can’t measure. Getting better visibility of your consumption is often the fastest route to finding savings.
- Upgrade to half-hourly smart metering. Granular consumption data lets you identify wasteful patterns and target your efforts effectively.
- Audit your compressed air systems. Leaks are common and costly — research suggests they typically account for 20–30% of compressed air energy consumption.
- Check HVAC schedules. Heating, ventilation, and cooling systems running out of hours or during shutdowns are a common source of avoidable waste.
- Install variable speed drives (VSDs). Fitting VSDs to motors and pumps can cut motor energy use by up to 50%, with payback periods often well under three years.
- Switch to LED lighting. If you haven’t already, this remains one of the simplest and fastest-payback investments available.
Renewables & on-site generation
Summer is the ideal time to gather data on your site’s generation potential — and the economics of on-site renewables have never been more compelling.
- Assess your solar potential. Roof space, car parks, and unused land can all accommodate solar PV. Summer provides the best generation data for feasibility assessments.
- Consider a Power Purchase Agreement (PPA). A PPA lets you lock in below-market electricity prices from a renewable generator, often with no upfront capital cost.
- Look at battery storage. Pairing storage with solar or cheap overnight grid power means you can shift consumption away from expensive peak periods.
Levy & tax recovery
These savings are frequently overlooked — but they can be substantial.
- Check your Climate Change Agreement (CCA) status. Businesses in eligible sectors can claim significant discounts on the Climate Change Levy. If you’re not in a CCA, it’s worth exploring whether you qualify.
- Verify your VAT rate. If your energy consumption is below de minimis thresholds, or if you have mixed-use premises, you may be entitled to pay 5% VAT rather than 20%. Many businesses are overpaying without realising it.
Conclusion
Energy costs are a major overhead for large manufacturers, and the conditions this summer make it a particularly good time to act. Wholesale prices have been under downward pressure in recent weeks, creating a window for businesses to lock in competitive rates before market conditions shift.
Whether you’re looking to renegotiate your contract, cut consumption, invest in generation, or simply recover levies you shouldn’t have been paying, the opportunity is there — but it won’t last indefinitely.
Cibus Energy specialises in energy procurement and cost reduction for industrial and commercial businesses. Get in touch to find out how much you could save.