EY: How Sustainability Impacts Business Energy Choices
Electrification is accelerating dramatically, helping businesses to become more sustainable and prepare for the energy transition.
EY reports that 70% of business customers are set to dedicate more focus to energy, but the move to EVs and growth of AI is accelerating electricity demand.
“The opportunity to support this soaring demand is a golden one for energy providers and the entire energy ecosystem, but they may not be ready,” writes Greg Guthridge, Global Energy & Resources Customer Experience Transformation Leader at EY, in the report.
“Years of stagnant growth and a focus on residential consumers mean many providers have become complacent, losing the capabilities to serve increasingly demanding business needs.
“Now is the time for providers to step up to help businesses realise their energy ambitions.”
Business challenges with energy providers
According to EY's survey, seven out of ten businesses have developed a comprehensive energy strategy with specific actions and investments.
The primary challenges they face include financing and costs, navigating complex regulations and dealing with energy providers.
Stability of energy supply is a priority and 64% of businesses said that volatile energy costs are already impacting profitability.
Around a third of businesses told EY they are not confident that their provider adds value and 74% said traditional customer service approaches offered by their provider are no longer good enough.
Greg writes: “It’s time for providers to rethink the service they offer – and to whom it is offered. In today’s businesses, energy is everybody’s business.”
Sustainable energy requirements
Reliability and affordability are reported as paramount for businesses when it comes to energy needs, with sustainability following close behind.
EY's findings reveal that nearly all surveyed businesses have set energy goals focused on increasing their use of carbon-free energy and reducing emissions.
Many are planning to adopt solutions such as large-scale generation, microgrids and on-site battery storage within the next three years.
While businesses continue to source renewable energy and natural gas from traditional energy providers, they are turning to specialised solution providers and energy management companies for other needs.
Collaboration could be the answer to some of these challenges.
“Smart alliances better support businesses to meet their energy ambitions in a sustainable way, while helping providers secure their own future,” Greg writes.
EY cites AES as an example. It has worked with different partners in different ways to meet the needs of customers, including creating battery storage for industrial applications with Siemens and partnering with Google to develop a carbon free energy data centre solution.
What businesses are looking for
Business customers prioritise providers' ability to meet their nuanced needs, EY says.
When evaluating energy providers, businesses rank factors such as energy resilience, expertise and innovation, support and customisation and energy options as most important.
Nearly all businesses surveyed expect energy providers to offer advanced digital tools, with more than two-thirds anticipating that artificial intelligence will be integrated into their experience.
Specifically, businesses are looking for AI to solve issues autonomously, analyse energy use and provide deeper insights.
“With global electricity demand set to double over the next 25 years, strategic energy planning isn’t just smart, it’s mission-critical,” Steve Wanner, EY Americas Industrials and Energy Leader, says on LinkedIn.
“The successful leaders will reimagine energy from end-to-end, aligning it with both their business ambitions and the growing needs of their clients.”
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