Government launches campaign to help businesses drive down energy bills

  • New campaign will help businesses boost their energy efficiency, cut costs and increase their cashflow as government ads hit the airwaves from next week.
  • UK businesses, charities and other organisations to continue receiving energy bill support with energy and trade intensive industries expected to save around 20% on wholesale energy costs.
  • Comes as the Energy Price Guarantee continues to keep a typical household energy bill at around £2,500.

A new campaign to help businesses, charities and public sector bodies increase their energy efficiency and drive down bills by making simple changes at low-to-no cost has been launched by the UK government today.

The campaign, targeted at small and medium sized businesses, will offer guidance on how organisations can make significant savings while cutting emissions, from installing light and heating timers, to turning down boiler flow temperature and changing light bulbs.

Many organisations are already aware of ways to boost their energy efficiency and have put these measures into practice. However, a substantial number of businesses are missing out on huge potential savings, due to a lack of information on how to cut down on their energy costs.

For many companies, a 20% cut in energy costs represents the same bottom-line benefit as a 5% increase in sales. A new website will help organisations access simple, low-to-no cost advice, outlining a range of possible actions, from having better sight of current energy use to upgrading and modifying equipment.

Examples of businesses already benefiting from energy efficiency measures:

  • LED lighting allowed a carpark in Bedford to cut their average annual lighting costs by 50%. Lurke Street Multistorey Carpark installed lighting throughout their premises in 2017, replacing older, less energy efficient lighting. By installing a smart meter they were able to actively track and compare year-on-year savings – on average £50,000 per year – allowing them to build business cases for further investments.
  • Marlec Engineering, a wind turbine manufacturer in Corby, switched to energy saving lighting as part of a range of measures to make their business premises more energy efficient. The company replaced T8 Fluorescent lamps with new, energy saving LED tubes. The lighting did not reduce light levels in the office and achieved a 60% saving on lighting costs.

To make sure as many businesses as possible know about the campaign, it will be promoted through partnerships with the British Chambers of Commerce and Federation of Small Business and paid advertorial across TV, radio, social media and more.

It follows the launch of the government’s £18 million ‘It All Adds Up’ campaign last year. This provides similar advice for households, saving them hundreds on their energy bills, and saw UK sales of ‘draught protection products’ on eBay double shortly after the launch.

Minister for Energy Efficiency and Green Finance Lord Callanan said:

Falling wholesale energy prices are welcome news, but this in no way changes our firm, long-term commitments to vastly boost UK energy efficiency across industry and households.

From today businesses, charities and public sector bodies can access helpful and practical advice on simple actions they can take to substantially reduce their energy use – and potentially increase profits.

Not only will this help lower operational costs by up to hundreds of thousands of pounds, but smarter energy use will help us deliver on our critical pledges to cut demand by 15% and reach net zero by 2050.

The new site also offers guidance on taking full advantage of the government’s range of energy support schemes available, such as the new Energy Bills Discount Scheme, which offers a unit discount on bills, and the Boiler Upgrade Scheme, which offers grants to help make installing heat pumps and biomass boilers as cheap as a gas boiler.

Adrian Dennis, Managing Director of Marlec Engineering, said:

Our business works with an absolute focus on sustainable energy solutions. We’ve invested in electric company cars and eco-friendly packaging. But upgrading to LED lighting is low-cost, and one of the simplest ways to promote sustainability in-house and save money on utility bills. We’d encourage other businesses to upgrade as well.

Energy Bills Discount Scheme

From today organisations across the country will start receiving money off their energy bills through the new Energy Bills Discount Scheme. It comes as wholesale gas prices are at levels not seen since before Russia’s illegal invasion of Ukraine, with eligible UK businesses, charities, public sector bodies and others to receive the discount until 31 March 2024.

Customers do not need to apply for the universal discount, with suppliers automatically factoring it into the bills of all eligible non-domestic customers.

The new scheme replaces the Energy Bill Relief Scheme, which by late March had paid out £5.6 billion – around £35 million a day to cut energy costs for businesses.

Minister for Energy Consumers and Affordability Amanda Solloway said:

This government will always be unapologetically pro-business. We’ve spent over £5 billion to protect against disruption to UK industry at the hands of Putin, saving many businesses around half on their wholesale energy costs this winter.

The new level of support offered today reflects a substantial drop in global energy prices – now at their lowest level since before Russia’s illegal invasion of Ukraine.

We will continue to firmly back UK industry and are making sure those unable to cut back on their energy use continue to be shielded.

Dhara Vyas, Deputy CEO at Energy UK, said:

Despite recent falls, wholesale gas prices are still high by historical standards, making this is a difficult time for businesses up and down the country. Energy suppliers are working with businesses to come up with innovative solutions that will help customers afford their bills while providing improved customer service and information. But high prices cannot be solved by industry alone, so we’re pleased government and industry have worked together to ensure delivery of this critical, extended support is on time. We particularly welcome the launch of a business energy campaign will help reduce bills now and protect against future crises.

Meanwhile, eligible energy and trade intensive industries will be able to apply for a higher level of support through a GOV.UK portal later this month. This is expected to save some businesses 20% of predicted wholesale energy costs.

Domestic heat networks will also receive a new, sector-specific support rate. This will make sure these customers do not face disproportionately higher energy bills under the Energy Bills Discount Scheme than those supported by the Energy Price Guarantee.

The discount is expected to be reflected in bills from May onwards, with support backdated to 1 April.

Minister Solloway met with Ofgem, energy suppliers and others earlier this week to discuss what more suppliers can do to help business customers fixed into long-term contracts at high prices – especially those in sectors currently facing challenges.

Non-Standard Cases

The government is today announcing further that non-domestic energy support will be extended and eligibility expanded to include customers receiving energy from non-licensed suppliers through the public electricity or gas grid.

These customers will be able to apply for Non-Standard Cases support under the Energy Bills Discount Scheme covering similar levels of energy costs from 1 April 2023 to 31 March 2024.

Non-Standard Cases support will also be expanded to include non-domestic customers who receive electricity or gas from license-exempt suppliers via private wire or pipe and where prices paid are pegged to wholesale energy prices. This wider group can apply for backdated support under the Energy Bill Relief Scheme as well as under the new Energy Bills Discount Scheme.

Further information about how eligible customers can apply will be provided on GOV.UK in due course.

Notes to editors:

Business Energy Efficiency campaign

Advice offered on the new government website will be continuously updated with sector-specific guidance, successful case studies and any new, relevant schemes. Key actions advised include:

  • Undertaking an energy review
  • Installing SMART meters
  • Reviewing tariffs
  • Installing light timers and changing lightbulbs
  • Timing heating and turning down boiler flow temperature

Energy Bills Discount Scheme

From today, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.

This will be subject to a wholesale price threshold – £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing wholesale energy costs below this level will not receive support.

These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price. Some Energy and Trade Intensive Industries will receive a higher level of support. The price threshold for this element of the scheme will be £99/MWh for gas and £185/MWh for electricity. This discount will only apply to 70% of energy consumption and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.

The Energy Bill Discount Scheme will be delivered through regulations made under the Energy Prices Act 2022. The Regulations are expected to be made in late April 2023 and the scheme will not be finalised until they are made.

  • Further information on the Energy Bills Discount Scheme can be found here.
  • Further information on the Energy Price Guarantee can be found here.
  • Further information on the EBRS for Non Standard Cases can be found here [add link]
  • Further information on the Boiler Upgrade Scheme can be found here.
  • Improving the energy efficiency of homes is the best long-term method of tackling fuel poverty, and that’s why the government has committed over £6.6 billion in this parliament, with a further £6 billion committed to 2028.
  • The government last month announced the allocation of £1.8 billion to boost energy efficiency and cut emissions of homes and public buildings across England.

Energy Price Guarantee

Households will not feel the full force of Ofgem’s new Price Cap – at £3,280 from today –after the Government announced a three-month extension of the Energy Price Guarantee from April to the end of June – meaning the typical household bill will remain at the yearly equivalent of £2,500. The Guarantee protects customers from increases in energy costs by limiting the amount suppliers can charge per unit of energy.

The Guarantee is just one element of support offered by the government to household this winter, having stepped in to pay around half of the typical bill. Other support has included £400 payments towards bills through the Energy Bills Support Scheme. To date £5.5 billion has been paid out through the Energy Price Guarantee and £9.4 billion through the Energy Bills Support Scheme.

Link: Government launches campaign to help businesses drive down energy bills
Source: Assent Information Services