Bowers & Jones Managing Director Jane Sommerville joined BBC Radio 5 Live’s Wake Up to Money to discuss one of the biggest pressures facing British industry: UK manufacturing energy costs.
Speaking from the perspective of a West Midlands manufacturer, Jane explained how dramatically the cost of electricity has changed for Bowers & Jones in just five years.
Despite significant investment in energy efficiency and a 25% reduction in electricity consumption, the company is now paying approximately 30% more for its electricity.
It is a stark example of a problem affecting manufacturers across the UK. Businesses can invest, become more efficient and reduce the amount of energy they consume, but still find themselves facing significantly higher costs.
From 12p a Day to £23 a Day in Standing Charges
One of the most striking comparisons Jane highlighted during the interview was the change in Bowers & Jones’ electricity standing charge.
In 2021, the company was paying around 12p per day. Today, that figure is approximately £23 per day.
That means an annual cost which was once around £43 has risen to nearly £10,000, before the business has used a single unit of electricity.
For an energy-intensive manufacturing business, electricity has always been an important overhead. However, the increasing proportion of the bill made up of charges that cannot be reduced simply by consuming less energy presents manufacturers with a particular challenge.
Investing to Reduce Energy Consumption
Bowers & Jones has not stood still in response to rising UK manufacturing energy costs.
Continued investment in the company’s Bilston manufacturing facility has included newer, more energy-efficient machinery alongside measures such as LED lighting, motion sensors and improved energy management.
This forms part of a wider programme of continuous investment in the business, with Bowers & Jones installing major new production machinery each year as it modernises its manufacturing capabilities.
Those measures are working.
Electricity consumption has fallen by approximately 25%. Yet despite using a quarter less electricity, the overall cost has increased by around 30%.
As Jane explained on Wake Up to Money, that makes energy efficiency only one part of a much bigger issue for UK manufacturers.
The Impact of Global Events on British Manufacturers
Recent years have also demonstrated just how exposed manufacturing businesses can be to movements in international energy markets.
Following Russia’s invasion of Ukraine, Bowers & Jones saw its annual energy costs rise to more than £100,000.
That experience has influenced how the company now manages its energy purchasing. When conflict involving Iran created further uncertainty in energy markets earlier this year, Bowers & Jones took the decision to secure its electricity costs through to 2028.
For manufacturers trying to plan investment, staffing, production and pricing, greater certainty over a major overhead can be extremely valuable.
However, the impact of energy prices does not stop at the factory electricity bill.
Energy Costs Feed Through the Manufacturing Supply Chain
Bowers & Jones manufactures precision roll tooling and engineering components for customers in the UK and internationally.
The steels and other materials used within manufacturing are themselves produced through energy-intensive processes. Rising energy costs can therefore affect a manufacturer twice: directly through the energy required to operate its own facility and indirectly through increased material and supply-chain costs.
This matters particularly for British manufacturers competing in international markets.
UK businesses do not operate in isolation. Manufacturers bidding for work against competitors elsewhere in Europe and around the world must remain competitive on price while continuing to invest in machinery, skills, quality and environmental performance.
Energy costs therefore become more than an overhead. They can directly influence the competitiveness of British manufacturing.
Efficiency Still Matters
The fact that Bowers & Jones is paying more despite consuming less does not diminish the importance of reducing energy usage.
Quite the opposite.
The company’s investment in modern machinery and energy-saving measures means its consumption is substantially lower than it would otherwise have been. Those improvements also support Bowers & Jones’ wider environmental commitments, including its ISO 14001 Environmental Management System certification.
Modernising the Bilston facility is also about more than electricity consumption. Bowers & Jones’ ongoing investment programme is designed to improve productivity, reliability and manufacturing capability while creating a more resilient operation. Its recent machinery investment forms part of a programme that has seen major new equipment installed in six consecutive years.
For Bowers & Jones, reducing waste and improving efficiency remain commercially and environmentally important, even when factors outside the company’s control continue to push costs upwards.
Giving UK Manufacturing a Voice
Jane’s appearance on BBC Radio 5 Live provided an opportunity to put real figures behind a subject often discussed only in national or economic terms.
A move from 12p to £23 per day in standing charges, a 25% reduction in consumption accompanied by a 30% increase in cost, and an energy bill that has previously exceeded £100,000 per year demonstrate what changes in the energy market can mean at factory level.
Bowers & Jones has spent more than 70 years manufacturing in the West Midlands and continues to invest in its Bilston facility, its people and the machinery needed to compete internationally.
The challenge for British manufacturing is ensuring that businesses making those investments can remain competitive while facing energy costs over which they have increasingly limited control.
