UK-based manufacturers could improve their output by as much as £2.56 billion by 2025 – and boost the UK’s international competitiveness – by investing more in energy efficiency technologies, Barclays has claimed.
In its ‘Powering on – Energy resilience in UK manufacturing’ report, issued earlier this week, the bank sought to examine the extent to which manufacturing businesses in the UK have been investing in their energy efficiency and to identify the key drivers for doing so.
Barclays found that not only are manufacturers concerned by the resilience of the UK’s energy supply and increasing energy costs, but they are also fearful of increased disruptions to supply happening in the future. More than two thirds of respondents to the survey said their business was particularly vulnerable to that threat occurring.
Of the businesses surveyed by Barclays, just 24% reported that they regarded themselves to be resilient to increasing energy costs or supply disruptions and had strategies in place. Those strategies included investment in on-site renewable generation and energy management technologies, although the investments were commonly small – less than £10,000 in total – and usually in the energy efficiency category.
A lack of financial resources and uncertain returns were found to be key barriers to more ambitious investments in this field, however the benefits of improved energy efficiency were significant. In assessing that more widespread and accelerated investments in energy efficiency and management technologies could boost output by £2.56 billion by 2025, Barclays also found that overall energy usage in the manufacturing sector could fall by almost one-third (31.6%), an amount which would make a significant contribution towards the country’s climate ambitions.
Barclays also drew into vision the impact of the UK’s Brexit referendum and the renewed need for British manufacturers to remain competitive with their foreign counterparts.
“There is now a more urgent need and a unique opportunity to develop an energy and industrial policy that meets the needs of UK manufacturing in the post-Brexit environment.
“The increased investment in energy efficiency envisaged in this alternative economic scenario represents a significant opportunity for UK manufacturing to enhance its international competitiveness through better export performance and protection against low cost imports,” the report argued.
Mike Rigby, head of manufacturing, transport and logistics at Barclays, said energy resilience must be a “vital consideration” for UK manufacturers if they are to compete internationally.
“In recent months, attention has focused on the future of energy supply but we need to look at all aspects of energy. By considering energy management on the demand side in intensive sectors such as manufacturing, we can ensure the UK remains competitive,” Rigby added.
