TSA warns of ‘alarming’ energy price rises for commercial laundries

Price increases could hit hospitality, healthcare and industrial customers

The TSA (Textile Services Association) says that the rapidly rising energy prices will have a significant impact on laundries and describes the increases as ‘alarming’.  They come at a time when commercial laundries are struggling to meet demand, in the face of staff shortages and rising costs in raw materials, linen and wages.  They could result in even more pressure on prices for commercial laundry customers in the hospitality, healthcare and industrial markets.

“Energy typically amounts to around 10% of a laundry’s cost base – but the increases we are facing are off the scale,” says David Stevens, CEO of the TSA.  “They make the previous record highs of 2004 pale into insignificance.”

For example, in March 2021 the cost per therm of gas was around 42p.  Today the cost has breached 160p.  Similarly, electricity in March was around £54 per MWh.  Today’s settlement price is around £140 per MWh.  “It doesn’t end there,” says Stevens.  “The first week of September saw sixteen settlement (half hourly) periods with pricing in excess of £1000 per MWh.   Nine of these were above £3000 per MWh.  The highest was an incredible £4000 MWh.”

To make matters worse, currently the energy network is in a low demand phase – winter will see more demand and the pressure will mount on an already limited supply. There are a variety of reasons for the dramatic increases.  Key is a lack of supply throughout Europe, combined with a boom in demand from Asia, especially for LNG (Liquid Natural Gas).  In addition, recent poor weather and lack of wind has meant that renewable energy sources have been hit.

Fox Energy is one of the specialist suppliers working with commercial laundries.  Paul Dilley, a director at Fox, says, “The energy markets are reaching extraordinary highs with no sign of returning to normal any time soon.  Any business renewing a contract in the next six months may be at a significant disadvantage compared to those that have fixed contracts that were set when the market was substantially lower, even just a few months ago.

“We have been working with the laundry sector for many years and we have never seen anything like this before.  Sadly, it’s a trend we may see continuing through this winter season.”

The TSA is recommending that all laundries should make urgent allowances for these increases and contact their supplier or broker for advice.  “This is especially important for those on flexible energy contracts or that have existing fully fixed energy contracts due to expire within the next 6 months,” says Stevens.

If you have any queries, please do not hesitate to get in touch with us either via email or phone: 

E tsa@tsa-uk.org

T +44 (0) 20 3151 5600

Update from the TSA

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UK textile giant joins BITC network to get serious about sustainability

1 September 2021

Leading UK textile services provider Johnson Service Group PLC (JSG) is pleased to be joining the Business in the Community (BITC) network as of 1st September 2021.

BITC is the largest and longest established business-led membership organisation dedicated to responsible business.  Founded by HRH The Prince of Wales 40 years ago, the organisation works with their members to continually improve their responsible business practice, leveraging their collective impact for the benefit of communities. Membership of BITC is not just a badge, but a public commitment to a better way of doing business.

Chief Executive Officer for JSG, Peter Egan, said of the membership, “Within JSG we have a strong history of undertaking individual projects that are aimed at addressing the environmental and social impacts of some of our core business activities.  We’re now refreshing what we do by undertaking an exercise internally to define what sustainability means to us as a group and planning thereafter a strategic programme on our next steps.  Our new relationship with BITC will help to support our mission and enable us to effectively address the environmental and social impacts of our operations.”

To support the move towards a more joined up approach across JSG, the company recently appointed a Head of Sustainability, Alexandra Brennan. Alexandra, who brings with her over 15 years of experience in developing and embedding sustainability strategies, is currently conducting a full review of the company’s material impacts prior to a refreshed strategy launch in early 2022.

Executive Director of Membership for BITC, Nick Diamond, added, “We are delighted to welcome Johnson Service Group to the Prince’s Responsible Business Network. In joining Business in the Community, they become part of a growing network of progressive businesses who look beyond the profit motive, who want to make a difference within society, and who are prepared to collaborate to bring about change.  Johnson Service Group are demonstrating their commitment to addressing their social and environmental impacts, and we look forward to working with them as they refresh their wider sustainability strategy.”

For more information please contact sustainability@jsg.com