Norfolk has been at the forefront of the green energy industry for several years, with some of the world’s biggest projects located on and offshore in the region.
The growing number of renewable schemes in East Anglia are playing a key role in the government's strategy to tackle climate change, lessen dependency on fossil fuels, and reach the goal of being net zero by 2030.
“Norfolk is a pioneer in the renewable industry – the number of existing wind and solar farms across the county demonstrates that it’s embracing the change in mindset towards sustainability as we look to become a carbon neutral nation,” says Reece Dye, head of corporate dealing at international payment specialists, Clear Currency.
Investment in wind technology has seen significant growth in the county, with recently approved projects including Hornsea Three Offshore Wind Farm and Vanguard Offshore Wind Farm, owned by European energy giants, Ørsted and Vattenfall.
The success of these schemes further cements East Anglia as a leader in clean energy and will contribute to the government's plans to quadruple the UK’s offshore wind capacity by the end of the decade.
As well as the proliferation of wind power stations in the region, plans for other low carbon technologies are gaining momentum. EDF Renewables’ proposal for Bloy's Grove, one of the UK’s biggest solar energy projects, was recently given the green light by South Norfolk's council, while Hydrogen East has unveiled plans for the east coast to host a first-of-its-kind clean hydrogen cluster.
“As environmental responsibility continues to be a priority, the success of these projects, coupled with the existing infrastructure and resources already in place in East Anglia, undoubtedly creates a greater appetite for renewable energy companies looking to invest and expand,” says Reece.
“It’s already paying dividends now, but it’s in the years to come as the industry grows and technology advances when we’ll really see the benefits – not only in terms of investment opportunities and achieving green energy targets but also for the local community and the jobs it will create.”
Supply chain complications
Energy is one of the UK’s fastest-growing industries with continual fluctuations in supply and demand. As such, it’s imperative for energy businesses to understand and prepare for potential challenges to mitigate financial risk.
One of the main obstacles the industry faces is increasingly complex supply chains. Current economic and political events, such as rising energy costs and inflation following the pandemic, as well as the war in Ukraine, have exacerbated the situation and led to further delays, shortages and higher costs when sourcing materials from overseas.
These factors can have a significant impact on a company's bottom line, especially when coupled with the huge scale and longevity of energy projects, and the need to adhere to strict regulations and planning restrictions.
“Unfortunately, supply chain issues are going to be here for a while and there’s no easy fix – the process of lodging the initial proposals to the negotiation phase, and finally for construction to commence can take several years,” says Reece.
“When making international supplier or contractor payments, energy businesses need to be aware of how these global events could affect profitability, and be willing to adapt with an effective foreign exchange strategy.”
Currency risk exposure
Currency risk exposure is a key consideration for businesses making overseas purchases. Exchange rates are constantly fluctuating, meaning values can go up or down at any time, and even the slightest movement could drastically affect the cost of the acquisition.
“If the currency rate moves unfavourably during the negotiation period or when a payment is being made or received, companies can end up spending vastly more than intended,” says Reece. “The current market volatility that has been driven by various geopolitical events highlights the importance of having an effective hedging strategy to give you greater control of your budget and profits, especially when it comes to large-scale projects like renewables.”
While no one can predict how much values will rise or fall, working with a currency specialist can be invaluable when it comes to protecting businesses against adverse market movement. They can provide guidance on the best tools to alleviate the risk of unpredictable rates, including the use of forward contracts that lock in a fixed price for a set period.
“A currency expert will look at the whole business model for the next five to 10 years and establish what risk they can afford during the buying and selling period,” says Reece. “The more foresight we have, the more effective we can be in terms of ensuring companies are in a position to take advantage of the market if and when we do see some relief.
"Companies also need to adapt to the possibility of the current economic conditions worsening – putting in safeguards or potential contingency plans is just as crucial as formulating a strategy in anticipation of an economic recovery."
Clear Currency’s international payments solution
For energy companies making cross-border payments, Clear Currency can make the process hassle-free, with instant access to bank-beating exchange rates and same-day transfers. With their convenient online platform, businesses can make and receive payments in multiple currencies all in one place, quickly and securely.
Clear Currency’s team of specialists can offer a bespoke service to businesses; highlighting potential challenges and helping to implement cost-effective FX strategies.
Despite the ongoing challenges the global energy industry faces, consulting an expert can play a vital role in helping businesses overcome obstacles and achieve their long-term objectives.
Clear Currency is FCA regulated and has a 5* Trustpilot rating. Sign up for an account today.
For more information about making international payments, visit clearcurrency.co.uk.
Call +44 (0)20 7151 4871 or email edp@clearcurrency.co.uk for more information.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here