UK firms face 20% hike in energy bills

24th November 2011

Related Topics

Related tags

  • Manufacturing ,
  • Energy ,
  • Business & Industry ,
  • Management/saving ,
  • Renewable



Companies in the UK are likely see energy costs rise by up to 20% by 2020 as a result of the government's climate change policies, confirms energy secretary Chris Hune.

In announcing the government’s annual energy statement yesterday (23 November 2011), Hunhe acknowledged the policies in place to improve energy efficiency across the UK were typically going to add 19% to energy bills for the average medium energy consuming businesses and up to 20% for energy-intensive organisations.

Hunhe went on to renew government pledges to assist businesses, particularly those in energy-intensive sectors, in coping with increased energy costs.

“It is important that these industries remain competitive,” he said. “That is why we are working with the business department and the Treasury to announce measures before the end of the year to support those energy-intensive industries whose competitiveness is most at risk.”

EEF, the manufacturers’ organisation, reacted to the announcement by highlighting its findings that energy-intensive organisations are already paying 10% more than their German competitors, due in part to government policy, and that this is likely to widen to 15% by 2013.

“The analysis released today reinforces the urgent need for measures to safeguard the jobs and investment in Britain’s energy-intensive industries,” warned Steve Radley, EEF director of policy. “The government needs to get a firmer grip on the energy costs most directly under its control – those arising from its own policies. Failure to do so could threaten future investment in the manufacturing sector.”

Meanwhile the CBI welcomed government’s acknowledgement of the role that short-term energy costs plays in organisations’ deciding whether they can keep operating in the UK, but warned that policy certainty was the key to enabling the move to a low-carbon economy.

“The solution to energy prices in the long-term is to attract new investment in low-carbon infrastructure,” said Rhian Kelly, CBI director for business environment.

“We need the right policies in place to help reduce energy bills and attract essential investment for more secure, affordable and low-carbon energy infrastructure. Following the government’s recent unexpected changes to the solar feed-in tariff, it still has a long way to go to build business confidence.”

While the response from industry was mixed, DECC’s figures were welcomed by the renewable energy sector. It argues the data counters accusations in the mainstream press that support for renewables is resulting in larger household energy bills.

“The figures demonstrate this simple truth – that green measures, far from being expensive, can actually save us money,” said Maria McCaffery, chief executive of renewable energy trade association RenewableUK. “The 18p we’re paying for wind power now means our bills will be lower in the future – and we’ll have tens of thousands of new green-collar jobs, thanks to that investment.”

The estimates from DECC conclude that energy and climate change policies currently add 2% to the average household energy bill, and by 2020 energy efficiencies resulting from support for renewable energy would see consumers save 7% (£94 a year) on the cost of heating and powering their homes compared to what they would pay in the absence of such assistance.

Transform articles

Local authorities could have saved Green Homes Grant

The Green Homes Grant is set to deliver only a fraction of the jobs and improvements intended, leading to calls for more involvement from local authorities in future schemes.

23rd September 2021

Read more

COVID-19 recovery packages have largely focused on protecting, rather than transforming, existing industries, and have been a “lost opportunity” for speeding up the global energy transition.

23rd September 2021

Read more

None of England’s water and sewerage companies achieved all environmental expectations for the period 2015 to 2020, the Environment Agency has revealed. These targets included the reduction of total pollution incidents by at least one-third compared with 2012, and for incident self-reporting to be at least 75%.

30th July 2021

Read more

The UK’s pipeline for renewable energy projects could mitigate 90% of job losses caused by COVID-19 and help deliver the government’s ‘levelling up’ agenda. That is according to a recent report from consultancy EY-Parthenon, which outlines how the UK’s £108bn “visible pipeline” of investible renewable energy projects could create 625,000 jobs.

30th July 2021

Read more

Billions of people worldwide have been unable to access safe drinking water and sanitation in their homes during the COVID-19 pandemic, according to a progress report from the World Health Organisation focusing on the UN’s sixth Sustainable Development Goal (SDG 6) – to “ensure availability and sustainable management of water and sanitation for all by 2030”.

30th July 2021

Read more

The oil and gas industry is set to burn through its allocated carbon budget 13 years early unless decisive action is taken immediately, new analysis has found.

22nd July 2021

Read more

The UK will no longer use unabated coal to generate electricity from October 2024, one year earlier than originally planned, the Department for Business, Energy & Industrial Strategy has announced.

2nd July 2021

Read more

The UK government is not on track to deliver on its promise to improve the environment within a generation and is failing to stem the tide of biodiversity loss, a damning new report from MPs has revealed.

1st July 2021

Read more

Renewable energy will account for nearly 40% of the world's power mix by the end of this decade, overtaking coal within the next few years, according to research by GlobalData.

24th June 2021

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert