What's the impact of our policies on business energy bills?
Businesses that are medium-sized consumers of energy
- A medium-sized business user is defined by an annual consumption of between 2,778 and 27,777MWh of gas and between 2,000 and 19,999MWh of electricity.
- Businesses that are medium-sized consumers of energy currently face energy bills that are on average 18% higher as a result of policies. By 2020 the impact of policies is estimated to be 19%.
Measures that will reduce the impact of policies on energy bills
- Re-banding the Renewables Obligation to get more capacity for less impact on bills
- Funding the Renewable Heat Incentive through general taxation rather than a levy on the supply of fossil fuels.
- Deciding to make £40million saving in 2014/15 on spending for the small-scale Feed-in Tariff (FIT) scheme
- An extension of the climate change levy discount on electricity for participants in the Climate Change Agreements scheme to 2023 and an increase in the electricity discount from 65 per cent to 80 per cent from April 2013
- Considering several alternative funding options for providing financial support for the Government’s Carbon Capture and Storage commitments as it was announced they would not be funded through their own levy on the supply of electricity.
- A cap on the cost of policies funded through energy bills.
Gas and electricity prices
- Business users of energy in the UK have faced the lowest gas prices, on average, in the EU 15 over the past few years and electricity prices that are around the EU 15 median.
Energy efficiency and Green Deal
- While energy and climate change policies will add to UK energy prices going forward, this is also likely to apply to businesses in other EU countries and, through policies like the Green Deal, the Government is providing help for UK businesses to become more energy efficient – helping to save them energy.