Businesses could see energy bills increase fivefold in October

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  Posted by: electime      5th August 2022

Suppliers’ reluctance to take on new customers and the struggles of brokers and intermediaries to secure the quantities of quotes for their clients that they have been used to are sign posts of where the business energy sector could be heading. With businesses potentially struggling to get credit insurance, which limits business risk, increasing supplier concerns.

Robert Buckley, Head of Relationship Development at Cornwall Insight said: “Business energy prices have climbed considerably in the past 15 months, and they stand on the verge of another significant steep uplift when new contracts come in to place for the period from 1 October 2022.

“Logic dictates that there can only be so long that so many businesses can pay so much more for their energy without knock-on consequences for themselves, their suppliers, and the wider economy, and if we at Cornwall Insight are correct there will be no return to 2020-21 wholesale prices before 2030. Despite this, in contrast to households, there has been strikingly little said about the affordability of business energy bills.

“We must think much harder about what this energy crisis is doing to business. This is not only to ensure we don’t see loss of output, but so we don’t see companies with heritage, roots in their communities and otherwise good prospects washed away. Such an outcome would have consequential impacts on real people and families not just company balance sheets and GDP statistics. Yet the level of action by government is surprisingly small given their wider economic agenda could be at stake.

“We are simply not having the essential conversations in Great Britain on relief for, or of, structured energy savings from businesses. We must ask ourselves whether we should be following the example of countries such as Germany, who are talking about the potential for rationing energy and taking energy savings measures now.

“But what else can be done? Opening a scheme where businesses could get paid to not use energy at peak times would be a start. After all we know what triggers winter demand peaks even if we do not know exactly when they will occur. Not only could such a scheme properly value demand response but there would be significant carbon savings too as fossil fuel generation would not need to run.”