'Hedging' can guard against rising energy prices, says expert

RISING electricity and gas prices will heap more pressure on businesses as they emerge from the recession, a Yorkshire energy expert has warned.

Simon Firth, business development manager at Bergen Energi UK, said firms which use a lot of power should consider 'hedging', which commits the buyer to paying a pre-determined price for future purchases. This would save money if the cost of energy later increased beyond the set level.

Mr Firth said: "Gas has risen by 30 per cent since March and electricity by 25 per cent. We are expecting prices to remain bullish over the short to medium term.

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"Firms should have a long-term horizon on buying energy and a hedging strategy to save them money."

He also said that although the link between gas and oil prices had reduced, the two were likely to be tied more closely in future.

Bergen Energi UK is a Norwegian-owned energy broker and was set up in 1991. Today it works with retail, water, transport and education firms in the private and public sector, including the National Air Traffic Service (Nats), and turns over 25 million euros (20.44m).

Next month Bergen Energi UK, which has its sole British base in Leeds, will appear at one of Europe's largest energy procurement, management and efficiency exhibitions.

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The Energy Event 2010, on September 8 and 9, is at the National Motorcycle Museum in Birmingham. Richard Southgate, vice-president at Bergen Energi UK, said: "There are some incredibly big issues in the industry at the moment. Environmental responsibility and the economy present some important challenges to overcome and as a result end users' energy strategies are becoming more detailed than ever before."

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