Inside Housing – Sponsored – How rising energy costs are impacting social landlords

Change supplier or procurement strategy?

Some survey responses give pause for thought in this respect. When asked if their organisation has forecast how much their energy bill will increase over the coming year, 17% of respondents say “no”. And 42% say that rising prices have not yet led to plans to change the way the organisation is procuring its energy, or its energy trading strategy.

“But supplier margin makes up between 2% and 5% of the overall delivered cost of energy, so just changing the supplier doesn’t necessarily mean that you’re going to get a better price,” Mr Pardesi explains.

“About 60-65% of the bill at the moment is made up of commodity cost, so the cost of energy on the commodities market. Having a more effective procurement and trading strategy to manage that commodity element is 10 to 15 times more effective than just changing energy supplier.

“Implementing a trading strategy to manage the commodity element of the bill in a more effective way gives you both budget certainty and opportunity to drive value from the commodities markets,” he adds.

There are other factors at play for social housing leaders making decisions about energy use in their own organisations – not least the net zero targets.

Some 40% of our respondents say that their organisation is already procuring some energy from renewable sources, with around 23% saying that although their employer does not currently use renewable energy, they expect that to change in the coming months.

Meanwhile, almost half say there is communication to staff about the importance of energy efficiency, and the same again say employees are being offered practical advice on how to reduce energy consumption.

Many report that the likes of energy-saving and movement-activated light bulbs are being installed, ways to reduce energy-intensive hotspots within the organisation are being explored and home-working introduced in response to the early phase of the pandemic is being maintained so as to reduce dependence on office space.

Chris Ellison, executive director of operations at B3 Living, says: “We’re already some way down the path of reducing our carbon footprint, including use of energy and re-procuring fixed-term, renewable suppliers.”