BUSINESS CONCERNS OVER REDUCED ENERGY SUPPORT LEADS TO CALLS FOR LONGER-TERM GOVERNMENT ACTION

Anew report has revealed that two thirds (67%) of large businesses believe that the Energy Bills Discount Scheme (EBDS), the new government scheme designed to help organisations with their energy costs, won’t protect them from the volatile wholesale energy market over the next 12 months.

This was one of the key findings from the 2023 Business Energy Tracker, an annual report conducted among 100 large energy users by npower Business Solutions (nBS), which monitors the impact of the energy market and policy decisions on businesses’ attitudes to energy, risk and investment planning.

For most businesses – those that aren’t classified as an Energy and Trade Intensive Industry (ETII) – the EBDS will result in a much lower level of support compared to the current scheme, the Energy Bill Relief Scheme (EBRS). Nearly one in five (19%) believe that the government should keep the EBRS until March 2024, despite the cost to the economy in doing so.

That said, while over half (52%) of respondents believed that continued financial support for businesses should be a top priority for the government, nearly three quarters (75%) recognised that a longer-term strategy is needed, calling for more incentives to help them reduce overall energy demand.

Anthony Ainsworth, Chief Operating Officer at nBS, comments:

“This year’s report reveals that energy is the top concern for UK businesses for the second year running, with 64% saying it will be the biggest risk they will face over the next 12 months, and three quarters (72%) anticipating that the cost of energy to their business will keep rising.

“Energy is also now a bigger boardlevel concern than in 2022, with 91% saying the c-suite was either very or quite concerned about energy at the moment, compared to 80% a year ago.

“This shows that the uncertainty over the past 12 months has naturally had an impact on business confidence, which is why they need policy clarity and consistency to help them plan ahead.

“For example, since our last Business Energy Tracker in 2022, we have had three Prime Ministers, four Chancellors of the Exchequers and three Secretary of States for Business, Energy and Industrial Strategy. We also now have a new governmental department - the Department for Energy Security and Net Zero (DESNZ).

“The results from this year’s research show why DESNZ has to double down on supporting businesses through energy efficiency strategies and more incentives to reduce demand.

“While additional immediate financial support would obviously be welcome, businesses want to start planning for the longer-term as well.”

With energy continuing to be ranked as the biggest concern facing business in 2023, the Business Energy Tracker also revealed that many organisations are already being proactive in managing risk.

Sustainability measures are now the top choice for business investment this year, up from second place in 2022. Almost two thirds (60%) of respondents said it would be their number one priority in 2023, recognising that, as well as helping them reach their net zero targets, a key benefit is greater long-term operational resiliency.

The results also showed that 44% of businesses believe that the energy crisis would help net zero progress, which is up from 36% in 2022. A similar number – 41% – still felt it would harm progress, although this was down from 49% last year.

However, despite this optimism, concerns around the cost of funding and delivering the transition remain high, with 95% saying they are very or a little concerned about the potential economic impact on their business.

Anthony

Ainsworth,

continues:

“We know that businesses will play a crucial role in the net zero transition. As in 2022, this research shows that despite such a challenging year, businesses still back net zero, and they recognise the environmental, commercial and reputational benefits it can bring.

“This is why it is so important that the views of businesses are taken into account when policy is shaped. If businesses are supported to increase energy efficiency and reduce demand, it will benefit the whole of the UK.”

For more information, and to download a copy of the report visit https://npowerbusinesssolutions. com/businessconfidence