PWC Finds 89% Energy Usage Increase

A recent study from PwC highlights a major shift in how UK businesses are handling energy consumption. According to the research, 89% of businesses in the UK have increased their energy use over the past year, and 83% expect this trend to continue into 2025. There is a prevailing assumption that energy costs will remain volatile, with 92% of businesses predicting that this will lead to higher prices for their products and services over the next two years, adding additional pressure to their balance sheets.

The research, which surveyed 750 businesses and 50 public sector organisations, reveals that 34% of businesses view technology, AI, automation, and electrification as the main drivers behind increased energy demand. Technology adoption is now pushing energy consumption upward, signalling a shift from the previous trend of declining usage.

As energy consumption rises, so does the pressure on businesses to fund their energy goals. PwC's survey found that high capital costs are the biggest hurdle to making progress on energy efficiency. Matt Alabaster, Energy, Utilities, Resources, and Infrastructure Deals Leader at PwC UK explains:

"Firstly, UK businesses are currently facing a number of challenges, including increasing costs and slow economic growth. Additionally, the payback period of some energy efficiency investments can be hard to assess without specialist input. Selling complex solutions to large organisations can be a long and highly consultative process. There is also the issue that many businesses are offering point solutions, but few have the scale or coverage to provide a comprehensive or national offer."

Most businesses are tapping into existing capital sources to fund energy initiatives, such as operating cash flow or credit facilities. However, the scale of investment required to make real progress means that private investment will be crucial moving forward. While 69% of businesses say external investment is essential for meeting energy objectives, only 31% are planning to use it as a funding source.

Vicky Parker, Industry Leader for Energy, Utilities, and Resources at PwC UK, commented:

“The UK is facing the start of a new transition in the energy market, and we are at an inflection point, where tough decisions will need to be made. The adoption of technology, combined with the electrification of businesses and the public sector, is on course to increase electricity consumption after a long-term trend of decline. The result is that what was once seen as an energy trilemma – managing cost, carbon, and security – now has an extra dimension: the need to supply enough stable power to unlock growth and productivity through technology-driven automation.”

“There is a lot at stake for the UK to solve this challenge. We need to view clean power ambitions alongside the global competitiveness of the economy, whilst taking into account affordability and the overall pace of change that is deliverable."

Businesses have made progress with low-cost solutions like switching to LED lighting or signing renewable energy supply agreements. However, they’re lagging when it comes to more capital-intensive solutions, such as retrofitting buildings for better energy efficiency or implementing electric vehicles. These projects take longer to pay off and require deeper organisational changes.

The public sector faces its own set of challenges. While private businesses are focused on balancing cost, carbon, and energy resilience, the public sector has even fewer resources. Many public sector respondents cited a lack of energy expertise within their organisations as a key barrier, and over a third noted the absence of energy solutions with immediate impact. However, public organisations are still prioritising energy reduction more than private businesses, with 36% stating it as their top objective.

Matt Alabaster, noted, “There is a wall of capital ‘waiting in the wings’ to engage in this sector, but bringing it on to the main stage will require collaboration across the public and private sectors. The reward would be investment that drives the development of a new ecosystem of suppliers, as well as a more efficient and cleaner economy.”

The survey also touched on the financial side, highlighting a gap between what businesses need to invest in energy initiatives and what’s actually being deployed. With private investment playing a pivotal role, the challenge now is creating the right conditions for this investment to flow.

Vicky Parker from PwC pointed out that the UK is at a crossroads, with decisions needing to be made about how to balance energy goals with economic realities. She stresses the importance of private capital in making the transition to clean power successful, but also notes that the government and businesses must collaborate to make this a reality.

As we look toward 2025, the focus will need to shift from just managing energy costs and emissions to also ensuring the stability and availability of energy to meet the demands of a technology-driven economy. The road ahead will require serious investment, and both public and private sectors must come together to create the right environment to support these changes.

One area of growth, however, is the commitment to achieving net zero by 2030. The proportion of businesses aiming for this goal has nearly doubled from last year, from 28% to 47%, signalling a growing awareness of the need to act on climate change.

Vicky Parker concluded, “Under any scenario, it is critical that the right level of support is in place to make this economically attractive, ensuring private investment can rapidly support these objectives and work alongside the public sector. The UK’s Clean Power 2030 Action Plan sets the ambition for the UK to be a global net-zero leader, but it will need to be balanced against tough economic realities, including energy security and affordability, alongside the levers that will need to be put in place to drive growth.”