The Energy Crisis Impact

Leigh Works gives an insight into their energy usage and how they have been affected by the rising costs since the wholesale price increase which came into effect in October 2022. Although this article takes a deeper look into one business this has become a shared concern with other local businesses across the town.

Leigh Works is a co-working space operating in Leigh town centre, providing facilities for local businesses and the community at an affordable price. They opened their doors over 3 years ago bringing high-skilled, high-paid workers to the town. They have managed to survive the uncertainties of Brexit and COVID-19 however, they are now facing even more challenges.

Energy prices have remained constant over the last decade and have rarely been a huge cost for many local businesses to operate. For Leigh Works, this wasn’t a concern to enable a successful business model. Prior to the energy crisis, electricity prices were 21p/kWh and 7p/kWh for natural gas. However, the price increase has quadrupled the costs for energy prices. Whereas local businesses have benefited from the energy bill relief scheme but face uncertainty when the scheme finishes at the end of March.

Foreseeing the expected energy cost raise, Leigh Works addressed the issue by applying energy reduction measures within the business during the months preceding the price rise.

They had already replaced all the lighting throughout the building with low energy LED equivalents in the years before the energy crisis however there were additional savings to be made.

This has included:

• Disconnecting a third of the lighting within the co-working space
• Switching off lighting when not in use or not absolutely necessary
• Switching of all exterior night lighting
• Installing smart switches and set them on timers
• Reducing the amount of IT and network equipment in use
• And most importantly, switching off the power at the mains breakers when the building is unoccupied in the evenings and at weekends

These energy-saving measures have had a minor impact on day-to-day business but the compromise has resulted in a 30% reduction in electricity consumption. Whilst necessity is the mother of invention, only so many energy reduction measures can be implemented.

In terms of costs, the monthly electricity bill has increased from £280 to £750 even with the additional energy-saving measures. From April 2023 this is projected to be £1,250 a month, or a 450% price increase in less than 12 months.

Leigh Works now face a dilemma: do they pass the price increase on to their customers so they can remain open or simply close because the cost of providing services to the community is unsustainable?

Adam Prescott, Co-founder of Leigh Works, says: “We have done everything we can to reduce our energy consumption but it’s only made a tiny dent in our sky-rocketing energy bills. We currently charge £69 per month for hot-desking. If we were to pass on the full cost of our energy bills, we would need to charge closer to £200.”

Leigh Works are not alone and we've heard from several business facing the same dilemma. Please get in touch and let us know how your business is coping. If you can offer help and advice to others we'd love to hear from you.