3 Aug. 2023
As we recover from the damage left by the pandemic, we now face a new challenge.
The continuous increase in the cost of energy confirms fears that we are on the verge of the worst crisis in recent decades.
But why are energy prices on the rise? And how is it impacting your energy bill?
The answer is simple: the price of gas is increasing… But let’s go into more detail. The oil and natural gas supply shortage has led to a sharp increase in electricity prices threatening recessions and a further wave of inflation worldwide. It is estimated that prices will continue to rise for the remainder of the year. The cost of gas has reportedly doubled since May, and as of recently, wholesale prices have shot up reaching a new peak for 2022. Significant amounts of energy are now being produced with coal rather than natural gas in the United States, Europe, and Asia, as a result of the sharp rises in natural gas costs; while prices in Europe are more than 10 times their average. Another significant concern is the rising usage of coal is driving up CO2 emissions from the production of power internationally.
The most important thing to evaluate in this situation is how the rising prices affect our economy.
And not only domestically, but also for companies and businesses.
Electricity is an essential resource for commercial buildings. It is fundamental for use on a daily basis, so an increase can have major consequences on business operations regardless of their size, be it micro or large.
Many companies in Europe are expected to experience the dual effects of higher energy prices and a probable drop in consumer expenditure as a result of consumers’ increased energy-related costs. Energy price increases result in higher production costs for non-energy industries and, to the degree that suppliers of non-energy products ad services adjust their selling prices, this directly impacts the purchasing power of households, as shown in the graph below.
Industries that depend on energy are already being impacted by rising power rates.
The price increase has not been the only outcome of this crisis.
Still, consumers have been forced to limit their energy consumption as a measure to cope with the limited supply not being sufficient to meet the increased demand.
As a result, many have had to take extreme measures to comply with the state’s requirements and avoid expensive bills, especially for small and large businesses. From working in the dark or changing to LED light bulbs to turning off the air conditioning during this hot summer, many have had to sacrifice the comfort of their indoor living spaces. In the upcoming months, we will see important changes in our bills, and we will have to face bigger costs. Therefore, it is crucial to go one step ahead and make decisions to avoid that this rise can devastate your business.
Luckily, your business can benefit from our Climate Intelligence solution. Our AI-powered technology can help you achieve the perfect indoor climate without going over budget. Setpoint can help you reduce energy consumption and peak shave demand, predict when your HVAC units need maintenance, and give you the power to manage each building’s HVAC in the palm of your hand. Don’t sacrifice your climate comfort, keep your building cool with Setpoint’s Climate Intelligence.
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