If you’re a business owner then the government’s recently unveiled milestone Energy Bill, created to ensure the long-term stability of energy provision in the UK, will have some implications for you and your business.
In short, the purpose of this agreement is to safeguard the move to more renewable energy sources with natural gas prices set to rise by 40% by 2020. The most important thing for your business is that this could lead to an increase in business energy prices and household bills in the short-term as the government looks to secure £7.6 billion to invest in low-carbon energy generation.¹
“This is a durable agreement across the Coalition against which companies can invest and support jobs and our economic recovery,” said Ed Davey, The Energy and Climate Change Secretary speaking last week. “The decisions we’ve reached are true to the Coalition Agreement, they mean we can introduce the Energy Bill next week and have essential electricity market reforms up and running by 2014 as planned.”
Davey also explained that the changes were an essential part of a much larger plan. “They will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”
What can your business do to adapt to the changes?
For SMEs who want to help manage their business electricity and gas costs, it’s a good idea to consider joining the government’s Green Deal initiative in early 2013.
The scheme constructs loan packages to encourage energy-saving improvements to business premises and works across two key principles:
1) The cost-savings made from the work must be equal or greater to any investment – this is the so-called Golden Rule.
2) There is no upfront investment. Repayments are worked out through the energy bill and funded by the cash the business would have paid had the improvements not been implemented.
You can choose to invest in more than 40 different measures including AC systems, boilers, ventilation and roof lights.