August market report

12 August 2022

The last few weeks have bought the catastrophic price increases we feared and had been warning businesses to prepare for, with market analysts predicting likely increases of a further 30% to December 2022. To put that in perspective, at the time of writing we are seeing live market prices of circa 66p pkWh for electric and 18p pkWh for gas and if the market follows the trend expected, businesses not in fully fixed term contracts or coming to the end of an existing contract face astronomical prices of circa 80p pkWh for electric and 24p pkWh for gas over the coming months.

The energy markets continue to remain highly volatile, even as Nord Stream 1 came back into operation following scheduled maintenance works, there was another drop in Russian gas flows (to just 20% capacity) due to continued disagreements regarding paperwork for pipeline parts and turbines, adding to wider supply issues and concerns about gas and power prices for the coming winter. Given the unprecedented price levels, it’s no surprise that businesses are concerned about energy prices and if there is enough supply to meet demand. The continued heat wave and even a drought being announced in parts of the UK is doing little to weaken prices as demand for energy intensive air conditioning and cooling outweighs the power generated by the UK’s solar and wind generation.

Numerous suppliers have announced their intentions not to take on any new business clients and only offer limited renewal contracts to existing customers with good credit and in favorable sectors. Both British Gas and Scottish Power have decided to pull out of the industrial and commercial marketplace altogether, honoring existing contracts to their end, but then will not be offering renewal terms, advising businesses to seek alternate supply. Total Energies and Corona and only offering terms on contracts beginning from the 1st of June 2023, and Drax and EDF are tending to only offer 1-year contracts. With so many suppliers withdrawing from the marketplace, albeit hopefully on a temporary basis, the remaining suppliers such as Scottish & Southern (SSE), Smartest Energy and Pozitive Energy are seeing enormous volumes of desperate businesses look to secure terms, which is causing large delays in contract offers being generated and secured, and in nearly 20 years in the industry I have never seen anything like this!

With live market pricing at such a level, businesses are committing to longer term contracts which are offering a lower overall kWh rate (as suppliers have longer periods to hedge prices over), to limit the increases to their business. This in my opinion is a sensible option, however there will undoubtedly be a point during that 3- or 4-year term where the market price will be lower than the agreed contracted rate – but this period where costs are higher will be hugely offset by the amount saved over the prior periods where the market exceeds that agreed.

With both the Government and energy suppliers both currently reluctant and maybe unable to assist even the domestic market, the future of the business market looks bleak for the foreseeable future.

In other industry news this month:

EU ban on Russian coal comes into force – The European ban on Russian coal has come into effect forecasting yearly losses of €8 billion to the Russian economy. Under the ban all European countries are forbidden to import Russian coal as part of the package of sanctions imposed on Russia. This is around ¼ of all Russian coal exports and joins other banned Russian exports such as crude oil and certain petroleum products.

Government’s energy crisis meeting resolves little – An emergency meeting was held between the Prime Minister, high-profile ministers and energy companies, Prime Minister Boris Johnson, Business Secretary Kwasi Kwarteng and Chancellor Nadhim Zahawi to discuss potential measures to mitigate the rising cost of living. After the meeting, Mr Johnson said: “I know people are worried about the difficult winter ahead, which is why we are providing support – including a £400 energy bill discount for all households. This morning, I urged electricity companies to continue working on ways to help with the cost of living”. Former Prime Minister Gordon Brown has also gone on record stating:” Energy companies that cannot offer to their customers lower bills should be temporarily brought into public ownership” but in response to Mr Brown’s views, a government spokesperson stated that: “A nationalised energy company would still have to buy the same expensive gas on global markets, so prices won’t be lowered in any case”. There had been hopes that with Britons facing unprecedented energy bill increases in October and January, that a deal could be struck that would see energy suppliers doing their bit to support both business and domestic customers. The consensus is that Kwasi Kwarteng is reluctant to enforce a stealth tax on the energy suppliers for fear that they would then be reluctant to ‘help’ in the future when the markets are expected to increase further, pushing many businesses to the brink of viability.

Ofgem says don’t cancel direct debits – but has no good alternatives – With the ‘Don’t Pay UK’ campaign gathering momentum via social media, trying to force energy companies to lower prices (which would never happen), Ofgem has broken silence stating that you should never cancel your direct debit with your energy supplier and Ofgem CEO Jonathan Brearley says cancelling your DD will simply drive-up costs for everybody.

Should you wish to cancel your direct debit, you should consider the following: Your bills will increase if you do not pay via direct debit, you are likely to incur a fee from you supplier and generally direct debit tariffs are far cheaper than prepayment tariffs, thus you will increase the amount you must pay unnecessarily. Your credit score is likely to be harmed as all energy firms report to the Credit Reference Agencies such as Experian, Equifax and TransUnion which will adversely affect your ability to obtain credit in the future. I have seen suggestions on social media that your credit record won’t be damaged if you make a complaint at the same time as cancelling your direct debit. A complaint can go first to your supplier and then be referred or passed onto to the Energy Ombudsman. It is correct that an energy supplier should not harm your credit record if there is a potentially valid dispute about a bill, but I don’t think saying you cannot afford the ongoing bills as the prices are too high would be seen as a valid reason to complain! Your energy supplier may want to fit a prepayment meter if you are in arrears. When you miss a payment, your energy supplier will want you to make an arrangement to pay your ongoing bills plus some extra towards the arrears. The supplier should consider your financial circumstances in setting the arrears payments, but the problem for millions from October will be that they cannot afford the ongoing bills, let alone any extra towards the arrears.  Suppliers can get a Warrant from a Magistrates Court to enable them to enter your home and fit a prepayment meter and if you have a new generation smart meter, it is possible that it could be switched to being a prepayment meter electronically. Paying for your energy by prepayment meter is more difficult and more expensive than direct debit and you may be forced to restrict your energy usage a lot and even ‘self-disconnect’ for periods. There is NO chance of being sent to prison as not paying an energy bill is not a criminal offence however meter tampering, to by-pass a meter or make it run slower, is a criminal offence and you can go to prison for these offenses. It can also be dangerous and result in fires – no matter how bad your situation, don’t even think about it, I have seen this happen on numerous occasions over the past few years. Another thing to ignore is any adverts for devices you can plug in that claim to reduce your energy consumption. They don’t work. Don’t waste your money on scams.

For help and advice and to find out how Fox Energy can support and assist your business in these turbulent times, get in touch by calling 01233 884510 or email info@foxenergy.co.uk.

Helping hospitality and laundries build a viable and sustainable partnership

The Textile Services Association (TSA) and UKHospitality hold second roundtable looking at joint industry challenges.

The event, which was held on Friday 22nd July at London Marriott Hotel Regents Park, was chaired by David Stevens, CEO of the TSA, and featured delegates from some of the UK’s biggest companies in both the hospitality and laundry sectors. The day consisted of two sessions. The first was broadly based around the current situation around commercial laundry services, how they operate within the hospitality ecosystem and the broader challenges both industries are facing.

This included discussing the impacts of rising costs and wages and the difficulties both sectors are facing with recruiting and retaining staff. Michael Jones, managing director of Fishers Services, noted that they are seeing a demand for flexibility in shift patterns from staff. Similarly, Sarah Simmonds, director of commercial procurement for Travelodge saw the trend for multi-skilling staff and diversifying roles increasing in importance.

The continued expansion of the number of hotels and the concomitant rise in demand for laundry services will be a big challenge for both industries if they are going to harmonise supply capability with demand. All participants agreed that closer working relationships to build the necessary infrastructure was necessary for it to succeed.

The TSA produces a laundry cost index which highlights the key elements of a laundry service and tracks movements in these costs. This is currently running at 23% and this figure formed the basis of the discussion. However even this rate does not reflect the wage pressures both industries are experiencing due to lag in gathering accurate figures. The cost of linen was also discussed, the importance of growing the culture of valuing the product which will support both the viability and the sustainability objectives of the group.

David Stevens noted that out of 7,000 tonnes of linen purchased every year for the hospitality industry only a very small percentage is used to its maximum potential. All parties agreed that there was progress to be made through improved staff training on best practices. Nigel Graham from Bourne Leisure stressed the need to change the culture and attitude, and the need for support from the laundry industry to communicate the importance of linen care.

The group also discussed alternative contractual arrangements as we develop stronger supply partnerships. It was felt the current arrangement do not always allow for long-term investments.

The second session focussed on the shared sustainability roadmap of UKHospitality and the TSA. David gave a presentation on the TSA’s new Infinite Textiles scheme. This is a recycling initiative to eliminate the amount of linen that ends up in landfill. The TSA is looking for ways to ensure that textiles can be recovered and recycled into new products using the latest fibre-to-fibre technologies.

Christoph Geppert, director of Grain Sustainability, has been engaged by the TSA to support their sustainability journey and to present its members with a series of objectives and a template roadmap for the membership to engage with.

From the top left of the screen in the room: Rona Tait, Managing Director (TDS Commercial/NLG) Helen Wood, Managing Director (Johnsons Hotel Linen) Linda Tilburn, Procurement (Premier Inn) Nigel Graham, Procurement (Bourne Leisure) Shyju Skariah, Director Programmes & Projects (TSA) Francesca LeGall, Specialist, Procurement (IHG) Paul Brown, Head of Purchasing (Best Western/Beacon) Sarah Simmonds, Director of Commercial Procurement (Travelodge) Mark Franklin, CEO (Elis UK) Kevin Godley, CEO (CLEAN) Michael Jones, Managing Director (Fishers Services) Jack Quick, Policy Manager (UK Hospitality) Tony Sophoclides, Strategic Affairs Director (UK Hospitality) David Stevens, CEO (TSA) Others who attended not in photo: Christoph Geppert, Director (Grain Sustainability) Emma Andersson, Director Finance & Membership (TSA)

He highlighted that meeting the targets regarding emissions caused across supply chains will require ongoing dialogue between hotels and laundries to optimise processes. In presenting the TSA’s roadmap he stressed the importance of the two industries working together – essentially, laundry is one of the areas hotels needs to focus on to reduce their scope 3 emissions. “Both industries need to be ready to act quickly,” he said. “The longer we wait to start reducing emissions across the value chain the more radical the change will have to be”.

Tony Sophoclides, strategic affairs director for UKHospitality, hailed the impressive work already being done within the hotel industry while stressing the need to go further.

While a great deal of progress has happened in terms of reducing the carbon footprint of laundries, the life cycle for hotel textiles is a complex one. David expressed his pleasure that the two industries were working together to align strategies at the beginning of this journey.

Following on from this, Jack Quick, UKHospitality’s Policy Manager, gave an overview of UKH’s current roadmap for improving sustainability and cutting emissions that fall under Scope 3. As around 90% of hospitality’s emissions come from supply chains it will involve co-operation and education to continue the impressive work that hospitality and commercial laundries have already accomplished. Helen Wood, managing director of Johnsons Hotel Linen observed that “Everyone needs to think differently” to reduce emissions throughout supply chains.

UKHospitality’s roadmap is currently aiming towards reducing operational emissions by 2030, with Net Zero by 2040. Going forward, both organisations will aim to promote and share best practices with simple and cost-effective ways to tackle sustainability.

The round table concluded with all parties agreeing to continue working together, with a pledge, to form a sustainability joint steering group and a separate project group to work within the housekeeping teams to provide training and support on improving the longevity of the linen. Furthermore, it was agreed that there would be further roundtables at an executive level, every six months, to keep everyone updated as hotels and laundries evolve viable models for sustainable operations between the two industries.

For more information on UKHospitality, please click here.

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

Setting the new standards for laundry safety

TSA and De Montfort University announce new laundry hygiene protocols.

Laundering textiles plays an important role in maintaining hygienic cleanliness but is particularly sensitive in settings like food production and healthcare. Following a collaborative research project between the Textile Services Association and De Montfort University Leicester (DMU) to establish a hygiene protocol test for laundries, the two organisations have announced the results, with the aim to help guarantee laundry is cleaned hygienically.

The study was run by Professor Katie Laird, a microbiologist at DMU. Professor Laird and her research team have extensive experience in studying healthcare textiles, publishing papers that demonstrated how long bacteria can survive on clothing, and wash processes that can decontaminate laundry, among others.

The primary focus of this research was centred on creating a testing method to determine the ability of any laundry process to disinfect textile items. However, if the project is to be successful, it cannot stop at just the results but must spearhead a major shift in global healthcare laundering.

Currently, a home washing machine used by a ward nurse for their hospital uniform is benchmarked differently from an industrial washing process used for hospital bed linen. The results of this project give us the ability to compare “apples with apples”.

However, at the wake of Covid-19 pandemic, the temporary emphasis of the research project switched to determine whether Coronavirus could survive on and be transmitted by textiles before the project team could get back to the main research objectives.

Professor Laird and her team were able to determine that human models of SARS-CoV-2 could survive on textiles for up to 48 hours. The research also inferred that if the laundry was washed at 40°C and above in a typical wash programme, no trace of the virus was being found in the resultant laundry load. This was good news for anyone involved in managing hygiene in textiles. Furthermore it also prevented a pointless increase in the industry’s carbon footprint, by making initial demands for 90⁰C washes unnecessary.

Following this the focus of the research returned to developing test protocols for all laundry processes over 60⁰C, ensuring that bacteria and viruses are being killed by the wash process. The resulting protocol is now being proposed for adoption by laundries that clean textiles for hospitals. Meanwhile, TSA and DMU will be continuing their collaboration to understand the needs of other healthcare-related sectors, such as care homes to help improve standards.

“As many members of the TSA provide laundry services for the healthcare sector it is vital that we support them to ensure they are attaining the highest possible standards,” says David Stevens, chief executive officer of the TSA. “This study has already delivered amazing results and a robust procedure for ensuring laundry safety, and we will continue to support future research.” 

Professor Laird is certain about the importance of the collaboration between DMU and the TSA. “We have worked together to create an internationally recognised protocol for standardising the assessment of the decontamination of laundry,” she says. “It’s important progress for the laundry industry and the next phase of research will be equally exciting for other sectors.”

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

Christeyns renews laundry sponsorship for Bantams

01 August 2022

Hygiene specialist Christeyns has extended its laundry sponsorship with Bradford City AFC.

The laundry chemicals specialist has renewed its laundry sponsorship deal now set to run until the end of the 2022/23 season, helping the club save thousands of pounds in laundry supplies.

At their University of Bradford Stadium home, on Valley Parade, Bradford City is home to over 150 players, incorporating the reserves, the development squad, the Academy as well as the first team. With several versions of the club strip, including home, away and training, there are over 210 sets of kit to wash in a week, not to mention towels and physiotherapy blankets.

Michael Shackleton, Commercial Manager at Bradford City said: “We would like to thank Christeyns for their continued generosity and support. The laundry sponsorship has been a real benefit to the club, not only with superbly clean kit but helping us save on energy and water usage too. “

The laundry operates at least six days a week for seven hours a day. Keeping the kit pitch perfect is not an easy job and top quality, tried and tested detergents are essential to keep things running smoothly.

Justin Kerslake, Operations Director Christeyns said: “We are delighted to continue our involvement with Bradford City and hope that it will be a successful next season for all the squads. It’s a pleasure to play our part in making sure all the players look their best.”

Founded in 1903 and pioneers of professional association football in the West Riding of Yorkshire, the Bantams’ stadium seats over 25,000 spectators and boasts over 14,000 season-ticket holders.

For further information visit:

www.christeyns.com