Anthony Ainsworth, Chief Operating Officer, npower Business Solutions
For more than two years, many UK organisations have been at the mercy of the volatile wholesale energy markets, with multiple factors resulting in increased costs at a time when the recovery from the Covid-19 pandemic was still ongoing.
Today, while prices remain higher than pre-crisis, the good news is that they seem to be on a downward trajectory, with our team reporting three-year lows.
However, as we welcome a new Labour government into Number 10 Downing Street, there is no doubt that a big challenge lies ahead. While one of its core pledges is to ‘Make Britain a Clean Energy Superpower’, and its key priorities include reforming the planning system, particularly to remove the previous ‘de facto’ ban on onshore wind, these things are easier said than done. And, they will take time.
However, if the new Labour administration is successful in its mission to reduce red tape, particularly around energy infrastructure, then it could unlock a huge amount of net zero potential from both the UK public and private sectors.
This was one of the core themes that emerged from our latest Business Energy Tracker report. In it, we asked large business energy users for their views on energy risk, how they are managing this risk and their views on net zero. We also asked them what they wanted to see from the new government.
They told us that more can be done to support them, with the need for policy clarity to help them make the necessary investments to support the energy and net zero transition coming out loud and clear.
The top three asks were:
- Support to help organisations to reduce overall energy demand, such as grants ortax breaks for installing energy efficiency measures and on-site generation, and investing in energy management platforms, so they can better manage their demand, reduce emissions and reinvest in their operations. This is something we have long campaigned for and needs to be a key priority for the new government.
- Reduction in non-commodity costs. Over the past few years, the level of costs applied to business invoices has increased significantly. For example, the non-commodity elements added to electricity invoices have risen from around £100 per MWh in Q1 2023, to £112 in Q1 2024 – and are set to jump to around £132 by Q4 2025. While this is being reviewed by Ofgem, businesses also want it to be a key priority for the government, to both reduce and simplify what they pay. While they know that some of these costs are necessary, they believe this is where red tape could be reduced, for example, by having one overall cost to pay.
- Reduction in red tape to help renewables schemes successfully meet local planning procedures. While accelerating the deployment of renewable energy is crucial to meeting the UK’s net zero targets, many schemes get caught up in red tape, planning rules and delays to grid connections. As the new government has recognised, removing these barriers will enable more schemes to progress, so we will wait with interest to see how these reforms translate into real life applications.
Join the Red Tape Challenge
Both public and private organisations will be crucial to delivering the UK’s energy security and net zero targets. That is why it is important that their voices are heard at the highest level.
This year is a perfect opportunity to work with the new government to inform them which energy and net zero policies do – and don’t – work for business energy users.
This is why we have launched a new campaign – the Red Tape Challenge. This is a movement that brings together the collective voices of organisations, partners and stakeholders to tell the government what they need to achieve their ambitions.
We are asking organisations to join our campaign to help shape policy and give them the confidence to make the vital investments for net zero, and keep the UK on track to meet our sustainability and energy security targets.
This is your chance to tell us about your own challenges with red tape, and which policies are helping or hindering your business. You can have your say here.
By working together with the government, we can accelerate towards our energy and net zero ambitions.
The 2024 Business Energy Tracker is available at npowerbusinesssolutions.com/businessconfidence2024
This article appeared in the July/August 2024 issue of Energy Manager magazine. Subscribe here.
