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11 January 2022
The “late adopters” trap and energy savings

Electricity (and gas) prices are reaching historically unprecedented levels.

You can read about it in BusinessInsider, but also in most of the business press.

They are often so high that in some industries there is doubt as to the profitability of further operations.
This is particularly visible in manufacturing industries – high-energy industries such as: production of cement, plastics, food, etc.

As the map above shows, Polish industry is uncompetitively energy-intensive. Since the beginning of the market economy in our country (90s), Poland saved itself with low labor costs, reasonable taxes and the possibility of subsidies or reliefs. As a result of development, however, it was a matter of time to reach the level of equilibrium where the sum of “advantages and disadvantages” of production in Poland would be equal to the economies of the old Europe. In my opinion, we have reached this level, or even (with momentum) we are crossing it.

At the same time, according to the opinion of the business press, there is a lot of money on the market at least since the mid-2010s.

In my opinion, now is the last moment to spend this money wisely, and broadly understood ENERGY EFFICIENCY has been, is and will be the best investment.

Unfortunately, money does not seem easy for activities related to energy efficiency. Such investments involve allocating additional funds now for future benefits. Benefits burdened with technical, market and legislative uncertainty. And unfortunately, sometimes also lack of understanding and common opinions.

What if we don’t undertake the transformation? Transformation on a Macro scale – i.e. national, but also Micro – each enterprise separately.

A few years ago, at a refrigeration industry conference, I spoke about the “late adopters trap.”

According to this scheme, financial stocks appear in the company as a result of good business on the revenue side (sales) and too cautious investments in improving production. In this case, investments in increasing energy efficiency. Temporarily low investments make the profit in the company even greater than in the competition. However, over time, competition investing (in energy savings) begins to reap the fruits of previously spent money. These fruits are lower operating costs that allow you to lower prices or act faster/better/etc. As our competitive advantage diminishes, our financial inventory shrinks until we can no longer afford “wise investments. What can happen then -> see the picture above.

At that time, this trap consisted in the need to change the refrigeration technology that would adapt the client to legal requirements and give significant energy savings. Unfortunately, a few entrepreneurs fell for it.

Now the whole economy can get caught – We must act!