Latest Energy Matters report reveals UK food and drink manufacturers are dissatisfied by UK energy policy bill increases

The second Energy Matters briefing of 2015, npower’s bi-monthly policy update for Business Solutions customers, reveals that 75% of UK food and drink manufacturers said that rising energy costs are a factor in decisions to expand the business.

Energy Matters aims to demystify new and proposed pieces of legislation to explain their impact on the bottom line of UK businesses. The latest issue focuses on the impact of EMR policy changes, specifically Government’s Contrast for Difference (CfD) and Capacity Mechanism (CM).

From April, large energy users’ bills will see an increase of £0.5/MWh. The impact will be minimal at first, but costs will ramp up, with DECC claiming that large energy users’ bills could increase by £8/MWh by 2020. DECC has estimated that by 2020 this additional amount represents increased electricity charges of about 10%.

From speaking to UK food and drink manufacturers, npower found that three quarters (75%) of these UK businesses said that rising energy costs are a factor in decisions to expand the business. Despite this, 38% of those surveyed said that they have not had enough warning about the bill increases in April, pointing to a perceived lack of engagement and transparency about the cost of energy policy by Government.

Of the businesses that were aware of the new EMR charges, it would appear that significant and potentially even drastic action has been taken to cope with rising energy costs. Specifically, over a quarter (26%) of food and drink manufacturers said they have either planned cuts to employees or freezes on recruitment.

Wayne Mitchell, Director of Markets & Innovation for npower Business Solutions, said:

“This research clearly proves that energy management should be one of the top priorities of every company board. To continue as is, perhaps hoping that global oil prices will take care of the problem, is not a long-term solution.

“In the face of general dissatisfaction with the forthcoming EMR charges, the good news is that a number of businesses appear to be increasingly serious about investing in effective energy management; 64% of businesses have already taken action. That still leaves 36% of businesses who – with the right approach – should be more than able to offset any additional charges stemming from EMR.”

Download the latest Energy Matters brief here for more information on how to navigate the complex energy market and save money on energy bills.