How can manufacturers navigate rising energy prices asks Anna Partington
In a market where wholesale prices, policy costs, and network charges can all shift materially over the lifetime of a contract, manufacturers are increasingly recognizing that energy procurement can no longer be treated as a static annual purchasing exercise. Volatility is no longer a short-term disruption to navigate, but a structural feature of the energy market.
The pressure is significant, the CBI and Energy UK have warned that the UK’s status as a major manufacturing center is at risk, following as much as 40 percent of businesses scaling back investment owing to the spike in energy costs. As a result, manufacturers are placing greater focus on procurement strategies that offer not just price certainty, but also flexibility and visibility. They are also seeking the ability to align energy purchasing more closely with operational requirements, future growth plans, and sustainability objectives.
It is clear, then, that optimizing energy strategies is becoming all-the-more essential for manufacturers’ success – and survival.
Energy technology is fast-evolving, and the data is now more sophisticated than ever. To unlock their energy potential, manufacturers need to embrace this world of data and deploy it to their advantage. But how can they develop this energy insight in the first place?
A new approach to procurement
Many manufacturers will be familiar with traditional, fixed-price energy contracts. Whereas once these ticked all the necessary certainty and simplicity boxes, they now lag behind other options when it comes to price and usage flexibility.
With energy prices so crucial to operations, manufacturers cannot afford to take a passive approach to consumption; they need strategies which allow them to manage usage actively.
Increasingly, manufacturers are turning to more flexible procurement structures, such as deploying matching products, which align supply with equivalent levels of renewable generation on a half-hourly basis, and Flexible Rate Contracts. These models give businesses far greater visibility and control over how and when energy is purchased and consumed, allowing procurement strategies to respond to real-time market conditions, operational demand, and carbon intensity.
Behind the meter generation, for example roof top solar, and Corporate Power Purchase Agreements (PPAs) can sit alongside these supply arrangements as part of a wider energy mix. This helps manufacturers balance price certainty, sustainability goals, and operational flexibility.
Digging into details
By harnessing this level of insight, manufacturers can move beyond traditional ‘buy and forget’ procurement towards a more flexible, informed, and commercially aligned approach to energy management.
The real value lies in turning energy procurement from a reactive purchasing exercise into a strategic operational tool. Detailed half-hourly consumption data allows manufacturers to build a far clearer picture of how energy use changes across shifts, production cycles, seasonal demand, and future growth plans.
This visibility helps businesses make more informed decisions about how much energy to secure in advance, how much exposure to retain to market pricing, and which procurement structures best align with their operational priorities and risk appetite. For manufacturers expecting expansion, electrification, or changing production patterns over the coming years, this longer-term view becomes increasingly important.
Granular data also creates opportunities to optimize day-to-day consumption. After identifying peak demand periods and analyzing pricing and carbon intensity trends, manufacturers may be able to shift certain non-critical loads or activities to lower cost periods or times when renewable generation is higher.
For example, some energy intensive processes may be better scheduled outside traditional evening peak demand windows, particularly where operational flexibility already exists. Over time, these adjustments can help businesses reduce costs, improve carbon performance, and build more resilient energy strategies.
Answering sustainability concerns
Of course, the benefits of integrating renewable generation into an energy strategy are not merely financial. They also dovetail with the increasing pressure to make operations more sustainable.
Whether it be from ESG commitments made by manufacturers themselves, increased external investor inquiries, retailer requirements, or consumer expectation, manufacturers can no longer escape the pressure to lower their carbon impact.
Again, possibilities for sophisticated usage profiling elevate already significant sustainable benefits. For instance, PPAs not only offer a means to integrate low-carbon, renewable energy into operations in the first place, but the high-quality data means this sustainable activity can be proven.
When it comes to grid-supplied energy, manufacturers have relied on the REGO system to prove renewable usage. This brings additional costs, and typically only allows aggregated energy matching on a yearly basis.
The half-hourly insights provided by modern supply arrangements and innovative matching products enable manufacturers to evidence renewable consumption and carbon performance far more transparently than annualized REGO matching alone.
Making data work for manufacturers
Current energy prices remain highly challenging for manufacturers. But the volatility seen in recent years has also reinforced the importance of regularly reviewing whether energy procurement strategies remain aligned with short- and long-term operational demands, financial priorities, and sustainability objectives.
As manufacturers look to navigate ongoing market uncertainty, the focus should be on building longer-term resilience rather than relying on short-term fixes. Businesses that combine flexible procurement structures, greater consumption visibility, and a clearer understanding of future energy requirements will be better placed to manage risk, control costs, and adapt to changing operational and sustainability pressures in the years ahead.
Anna Partington
Anna Partington is Head of Partnerships and Growth at Conrad Energy, one of the leading independent power producers in the UK, generating, buying and selling energy to the grid and business customers. It has more than 83 sites across the country generating a potential 983MW of power. Its portfolio includes gas, wind, solar and battery energy storage, all helping to facilitate the transition to Net Zero. Conrad Energy is a portfolio company of I Squared – a global, specialist infrastructure investor with over $40 billion of assets under management.
