Renewable energy suppliers are facing concerns that the new Energy Prices Bill, that has just recently passed into law, will give Business Secretary Grant Shapps to cap what he calls their ‘extraordinary income.’ While the Energy Prices Bill provides crucial support to business and household energy bills, it also has the power to override the energy regulator and place a firm cap on the incomes of energy providers. This could deter overseas investors from placing their assets into the UK’s renewable energy sector and could force them to close. Further to this, the stable regulatory environment for energy suppliers has been key to driving investment into Britain’s wind power industry, which is crucial to the country’s climate goals.
With Cop27 taking place next week from 6th November – 18th November, the country’s goal of reaching net zero by 2030, ending our reliance on fossil fuels is at the top of the agenda. However, this could be in jeopardy if overseas investment in the UK’s renewable energy sector halts due to income caps. If suppliers go bust, businesses already under financial strain may have to face the costly task of switching providers.
Across the board, the energy crisis is already eating into a majority of businesses’ profit margins, with SMEs across the country facing an average bill increase of over 250% in the last year alone, according to Cornwall Insight. In addition, a report by the Federation of Small Business found that 53% of small businesses will stagnate, decline or fold in the next 12 months. This is even more concerning when you consider that 53% of SMEs in the UK are not doing anything to monitor their energy efficiency, and are likely spending far more than they may need to on energy costs. Britain’s leading sustainability experts, SaveMoneyCutCarbon, explain that shopping around and switching tariffs to reduce energy bills has become obsolete.
The British Chambers of Commerce project that less than half (43%) of UK firms are expecting profitability in the next 12 months, whilst 1-in-4 hospitality and leisure businesses fear closing this year due to the inability to afford energy costs, according to eEnergy. In the wake of this setback, a new study from SaveMoneyCutCarbon has found that over half (51%) of employers in the UK still don’t know where or how to start reducing their carbon emissions. This is supported by research from Ecologi, which found that 42% of SME owners in the UK believe that it’s important to be sustainable, but struggle because of a lack of guidance.
