Energy and fuel costs have risen to the top of the business challenge agenda globally and in Ireland. New research from BDO finds that 57% of mid-market businesses cite supply chain pressures and higher energy and fuel costs among their biggest challenges. In Ireland, a Bibby Financial Services survey of 250 Irish SMEs finds that 51% cite energy costs as a primary concern, with average operating costs rising 10%.

The BDO findings confirm that energy volatility is now a boardroom priority. Three dimensions give business energy leaders reason to act: the scale of investment being deferred, the reactive measures under consideration, and the competitive advantage available to organisations that move first. The mid-market companies surveyed contribute more than £1.8 trillion (approximately €2.1 trillion) in revenues and account for one in three private sector jobs.

The investment implications are material. Three in five companies, 60%, intend to halt or reduce investment while waiting for conditions to stabilise, rising to over two-thirds in retail, technology, and financial services. In Ireland, wholesale electricity prices rose 19% between February and March 2026, according to the Central Statistics Office, driven by Middle East tensions. Ireland relies on imported natural gas for about half its energy needs, leaving businesses structurally exposed to the global price shocks BDO identifies.

The operational responses under consideration carry risks. Thirty-eight per cent of companies are considering raising customer costs and 30% are delaying hiring or reducing headcount. Irish SME body ISME has warned that many businesses face little choice but to pass rising fuel costs on to customers. Renewable procurement, energy efficiency, and demand management offer a more sustainable path.

The case for proactive energy management has rarely been stronger. BDO partner Richard Austin noted that energy and fuel costs were affecting businesses even before the Middle East conflict. In Ireland, energy prices rose 15.5% in the 12 months to April 2026, per the CSO. Businesses with on-site renewables, power purchase agreements, or demand response in place are absorbing these shocks from a stronger position.

Three priorities stand out for C-suite leaders. First, accelerate power purchase agreements and on-site generation now, securing price certainty ahead of further volatility. Second, commission energy audits to identify immediate efficiency gains and reduce exposure to wholesale price movements. Third, treat energy cost reduction as a competitive differentiator, given that 38% of businesses are already raising prices and 30% reducing headcount as a direct result of energy pressures.

Rising energy costs are challenging and a powerful incentive to invest in clean, domestic power. In Ireland, where renewable resources are abundant and policy support is strong, businesses that reduce fossil fuel dependency now will emerge with lower costs, stronger margins, and a more resilient energy supply.

(The views expressed by the writer are his/her own and do not necessarily reflect the views or positions of BusinessRiver.)