A new review from trade group Energy UK has revealed businesses need more support to switch to clean energy and take advantage of the business benefits this can bring.
The report, entitled “Review of policies to drive commercial and industrial decarbonisation,” summarises the outcome of Energy UK’s discussions with several industry trade groups, including the UK Green Building Council, British Glass, Solar Energy UK, the Food and Drink Federation, UK Hospitality, and the British Retail Consortium. The various trade groups gave feedback on the current decarbonisation policy landscape from the perspective of commerce and industry.
One of the major issues highlighted in the review is the cost of electricity, especially when compared to gas. Electricity prices currently sit at around five times the cost of gas, significantly disincentivising businesses to switch from gas to clean electricity sources. Energy UK suggests that a “clear starting point” for bringing electricity costs down is to remove extra costs which are added to electricity, such as the Renewable Obligation and the Feed-in Tariff, moving these costs into general taxation “in a way that is fiscally sustainable and protects customers”.
Additionally, the report recommends that small and medium enterprises (SMEs) need specific and tailored support to help them lower their energy bills and reduce their carbon emissions. Energy UK recommends that SMEs should be offered free audits to suggest ways in which they can reduce their energy usage, as well as easier access to capital to make such changes. An example of such a scheme already exists in Scotland; Business Energy Scotland, run by Energy Saving Trust, provides Scottish businesses with a free technical survey and report on ways to cut their emissions, as well as interest-free loans of up to £100,000 and grants of up to £30,000 to help make such changes. This scheme has proven successful, with participating businesses reducing their energy bills by up to 60% and carbon emissions by up to 90%.
Furthermore, Energy UK is recommending that a reform of non-domestic Energy Performance Certificates (EPCs) is made to ensure that landlords, tenants and investors of commercial buildings are able to receive accurate information on the energy and carbon performance of their premises, as well as a wider use of local authority powers to enforce energy efficiency standards and heat decarbonisation rulings to ensure all buildings meet a minimum standard.
Energy UK’s chief executive, Dhara Vyas, said: “Companies have always adapted to change, and businesses know they can benefit from investing in cleaner energy and green technologies. However, it has also been a challenging few years for many of them, not least due to high energy prices, so they need support from the government and policies that incentivise companies to make these changes.
“Everybody is aware of the constraints on public spending, but without supporting businesses through this challenge, they will remain vulnerable to future price shocks and other developments. The country can then end up paying in the long run by compensating businesses rather than enabling them to invest and future proof their operations.”