The dynamics of the UK’s energy market are notoriously complex and fraught with risk. The number of businesses and investors participating in the market continues to grow, and there are some great people, brands, ideas and energy behind many of the young businesses. However, what is a common theme across many of these smaller businesses is that they are not yet making money or hitting business plans, in some cases five years plus after launching. Whilst there has been a buoyancy and optimism in the market over the last few years, many new businesses and investors are struggling to understand where the money is and where to go to find it.
Much of the answer, for this industry, in developing a successful strategy, lies in the need to fully understand the inherent risk landscape associated with the current market.
I have talked to many frustrated business leaders, who have launched businesses, to find that ‘the grand plan’ is just not possible given the current market structure and design.
Great ideas are only great if the value associated with them flows back to the originator. In the energy industry, market design or the power of existing market players often imposes unforeseen barriers to new entrants or investors if not well understood at the outset.
Equally, if requiring a licence to participate in the market, lack of end to end understanding of the regulated obligations can often result in cashflow constraints either from ‘leakage’ or calls on credit, which in some cases if not properly managed can happen very quickly. Likewise, with all the regulatory burden and complex processes, losing control of operations is a common theme, and the consequent impact on cost and more importantly customer service and reputation, can be terminal.
Often there are multiple potential routes to market, and existing and developing competition, which if not properly understood, can result in failure to reach the market or non sustainable erosion of value. Great growth plans fail to materialise.
EnergyBridge focuses on helping investors and existing market participants, navigate through this complexity and develop sustainable and profitable business models. Whilst offering a flexible approach to bespoke consultancy, regular service offers include:
Energy Market Risk Workshops: Interactive workshops which unpack energy market design, competition, and regulatory and policy direction to highlight the consequent inherent flows of value and risk. Tailored to specific business models or planned investment strategies as required.
Energy Risk Due Diligence & Audit: In depth analysis of business risks whether for the purposes of M&A due diligence or business improvement. Independent assessment of commercial, operational and financial risks along with their supporting governance and controls.
Coaching, training and team development: Provision of coaching, training workshops, organisational design and recruitment support and board advisory services to help your business build the expertise and experience to navigate energy market risks.