Earlier this month, the Government published its long-awaited Energy Security Strategy in response to the ongoing energy crisis. The plan sets out how Great Britain will accelerate the deployment of wind, new nuclear, solar and hydrogen, whilst supporting the production of domestic oil and gas in the nearer term – which could see 95% of electricity by 2030 being low carbon.
Why have energy prices risen so sharply?
As the global economy reopened in the aftermath of the pandemic, the sudden surge in demand for everything from new cars to foreign holidays drove a massive spike in demand for oil and gas, dramatically increasing the price of these essential fuels.
This has been compounded by Russia’s illegal invasion of Ukraine. As the UK is part of a global market, the price we pay for gas is set internationally. And President Putin recently restricted the supply of Russian gas to the European market, further pushing up prices. The sanctions imposed by the UK will also inevitably have an adverse effect on all economies.
As a result of all these factors, European gas prices soared by more than 200% last year and coal prices increased by more than 100%. This record rise in global energy prices has led to an unavoidable increase in the cost of living in the UK, for both households and small businesses.
What new energy measures does the Strategy announce?
The government’s plan aims to boost Britain’s energy security following rising global energy prices and volatility in international markets.
It confirmed new commitments to supercharge clean energy and accelerate deployment, alongside the quicker expansion of nuclear, wind, solar, hydrogen, oil and gas.
It will also deliver over 40,000 more jobs in clean industries, totalling 480,000 jobs by 2030.
What support has been announced for businesses?
In its Strategy, the government says it “recognises that UK industrial electricity prices are higher than those of other countries and will act to address this”.
As a result, it will extend the EII Compensation Scheme for a further three years and intends to increase the aid intensity to up to 100% (1.5% of GVA). The EII exemption scheme is a government scheme intended to help energy-intensive industries stay competitive as the UK economy transitions to zero carbon.
It has increased the overall budget limit for the scheme accordingly but says “as is the case under the current scheme, if there is a risk of budget over-spend, we may choose to reduce the aid intensity”.
The government says it will “also consider other measures to support business including increasing the renewable obligation exemption to 100%”.
For solar power, there will be a consultation on the rules for projects, particularly on domestic and commercial rooftops, the government said.
Elsewhere, the government plans to establish a dedicated energy advice offering for smaller businesses to provide trusted advice on improving efficiency and decarbonization
How can Enexus help businesses combat rising energy prices?
Enexus Energy develops bespoke, innovative strategies to optimise the way your business purchases, generates and consumes energy.
We can help you take proactive measures for your 2022 business energy contracts. We can track the market on your behalf, source the very best prices and suggest alternative contract structures to ensure you buy energy in the most cost-effective way. We can also help you reduce consumption and guide you to lasting savings on your energy costs.
To see how we can help, please get in touch:
Tel: 01253 966 960