Adapting to Change: How Providers can meet the new Energy demands of Irish Businesses

Global electricity demand is expected to double in the next 25 years, with three quarters of this driven by businesses. Critical growth drivers include industrial expansion, the electrification of transportation, and our increasing reliance on data centres. This trend is particularly relevant for Irish businesses experiencing similar pressures. When it comes to data centres alone, as of April 2024, Ireland has 82 operational data centres, with 14 more under construction and planning approval granted for an additional 40¹.

Over 85% of businesses surveyed expect their electricity consumption to increase in the next three years, most sectors anticipating a rise of more than 10%, with demand driven by new equipment and electric vehicles (EVs), as well as tech and artificial intelligence (AI).

Energy providers have a real opportunity to break with years of stagnation and create a future where growth, sustainability, resilience, and affordability coexist. However, many have focused too much on residential, overlooking the urgent needs of businesses and their ability to meet those demands.

Business customers tell us they are frustrated with poor digital experiences, a lack of tailored options, and a perceived gap in energy expertise and advice. 69% plan to spend more time and money on taking charge of their energy solutions over the next three years and, given the choice, will shop around to find the best provider.

Businesses know that energy is critical to their future success. Of businesses surveyed, seven out of 10 (73%) have set a comprehensive energy strategy, with clear actions and investments aimed at achieving results.

These strategies prioritise affordability while reflecting businesses' desire for confidence in future energy stability. With 62% reporting that volatile energy costs affect profitability, access to energy for growth is crucial, as 68% worry about meeting future energy needs.

Businesses are trying to align their energy and growth goals but face hurdles like asset lifespan, unclear strategies, and complex regulations. Energy providers worldwide are considered a challenge to work with. Fortunately, Irish providers are not in the same bracket and are perceived as potentially part of the solution in overcoming these barriers for their customers. 

Despite this, 69% of companies here predict more complex energy needs in the next three years and are building internal expertise, seeking partnerships and outsourcing.

99% of businesses plan to grow their energy expertise in the next three years

Energy providers have an opportunity but must demonstrate their value as businesses enhance their own expertise and consider new players with better offerings. Currently, about one-third of businesses doubt their provider's value, and many expect improved customer service, including help with energy initiatives, strategy development, and tailored advice to cut costs.

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. Broader relationships that engage different people (across operations, finance, legal, HR and beyond) with business-centric energy solutions, potentially in partnership with other providers, can meet more diverse and sophisticated needs.

Energy providers must understand these nuances to create value and drive economic growth. Our research shows that factors such as organisational maturity, decarbonisation commitment, energy sensitivity, and relocation potential shape these needs. Providers with data insights can gain a competitive edge by tailoring their offerings.

Unsurprisingly, business customers prioritise their own needs when choosing an energy provider. They expect customised insights and tailored support and will switch providers if those expectations aren't met. Even in regulated markets, organisations can now select from new companies disrupting the traditional landscape with distributed energy options, demand management, and various energy services. Additionally, businesses can relocate to regions with more favourable energy conditions.

Technology is key to meeting rising business expectations, as all surveyed companies want energy providers to offer advanced digital tools, with over two-thirds expecting AI to help analyse energy use and drive innovation.

Providers can stand out by targeting the "neglected middle"—mid-sized businesses with revenues under $250 million. These companies have ambitious energy goals but lack the confidence and resources to meet them, being 20% less likely to have necessary strategies in place and less willing to pay for premium renewable energy.

Often overlooked and grouped with residential consumers, this segment offers a significant opportunity. By enhancing support with better account management and tailored tools, providers can create value and promote broader energy prosperity.

Answering this question is critical if providers, and the wider energy ecosystem, are to work together with businesses to drive energy prosperity by delivering growth, sustainability, resilience and affordability — all at once.

We’ve identified four potential roles for providers to help realign their organisation around business customer needs:

• Core energy operator: Providing options with simple rates, choice of source, and programs tailored to business needs
• Energy transition advocate: Actively supporting business customers to understand and adopt clean energy solutions, with advice and help to access the right products, services and incentives
• Energy platform orchestrator: Providing the platforms, technology and support to help businesses control and optimise use and costs
• Specialised solution provider: Offering a range of energy-related products and services individually or bundled together (e.g., solar panels, battery storage and energy-as-a-service)

Providers can choose a single role or a mix based on their solution portfolio.

No role is superior, but businesses have varying preferences: 42% prefer an energy transition advocate, while 26% favour a traditional core operator.

With 31% of business open to platform orchestration and specialised solutions, providers must reinvent themselves to embrace these roles.

Conclusion: Reshaping the future of energy

Energy is crucial for every business. Shared goals to grow, decarbonise and compete is increasingly centred on energy. Businesses are now ready to invest more time and money to get the energy experience that aligns with their broader objectives.

Meeting rising expectations is a challenge for providers, but it also offers a chance to capitalise on long-awaited demand growth. Taking bold steps to engage, collaborate, and innovate within a broader energy ecosystem can create a business energy experience that drives economic growth and leaves a lasting impact.

Six actions to take

1. Understand business customers deeply: Go beyond sector and geography to grasp the diverse drivers of needs and expectations.
2. Transform account managers into energy success managers: Equip them to provide tailored recommendations, track trends, and break down silos to make energy a competitive edge.
3. Enhance digital differentiation: Create tools that offer proactive insights and AI-driven self-service for education and analysis.
4. Address the “neglected middle”: Remove barriers for ambitious mid-sized organisations to achieve their energy goals.
5. Clarify your role in energy prosperity: Develop a proactive energy plan to identify technology gaps and meet business needs. 
6. Build a business energy ecosystem: Collaborate with partners to create innovative solutions that cater to diverse business customer needs.

Summary

New EY research reveals that businesses see energy as a competitive advantage but need help to get an edge. Providers that act now to reinvent the business energy experience can meet customers’ higher expectations to unlock revenue growth and shape a new age of energy prosperity. Success will require bold action and a willingness to collaborate and innovate across a broader energy ecosystem.