Business groups urge Treasury for support on energy costs

SMEs are particularly at risk from the spike in high energy prices, with experts advising businesses to accelerate their move to renewable energy and improve in-house energy management.

Posted on 27 January 2022

SMEs are particularly at risk from the spike in high energy prices, with experts advising businesses to accelerate their move to renewable energy and improve in-house energy management.

The current energy price spike was mostly been caused by a quadrupling of gas prices over the course of 2021. but abnormally high costs are unlikely to subside in the near future. Recent analysis from the International Energy Agency (IEA) suggests that the global economy could face three more years of turbulence in energy markets, with countries heavily reliant on gas (like the UK) set to be the most affected.

Just like householders, businesses have already been hit with a rapid increase in energy bills. However, unlike the former, businesses are not protected by an energy price cap.

SMEs most at risk

Five business member organisations - the British Chambers of Commerce, the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB), the Institute of Directors (IoD) and Make UK - have now written a joint letter to the Chancellor calling for more support for businesses.

The letter states that “the scale of crisis has left companies with little protection” while facing other soaring costs, with SMEs “the most at risk”.

“Many companies will be left with little other choice than to pass costs on to their customers, adding further inflationary pressure,” it adds.

What the experts are advising

Given that exposure to gas prices is the main causes of the spike, experts are encouraging businesses to shop around for renewable energy tariffs and accelerate plans to install their own on-site renewable generation where possible. According to one industry figure, global investment in renewables could increase by 25 per cent this year in response to the crisis.

Businesses are also being advised to improve metering and monitoring to track their energy use and identify opportunities to reduce their consumption. In the long-term, businesses able to switch away from gas heating to cleaner, electric heating options like heat pumps will also be more protected from volatile energy prices.

GC Business Growth Hub’s Resource Efficiency Service offers Greater Manchester SMEs fully-funded support to improve their energy efficiency.

 

 

 

Posted under General Interest and Energy Efficiency on 27 January 2022