The impact of the today’s Energy Bill announcement could be “catastrophic” for businesses in the UK.
Energy Forecaster, an online site that provides insight into the future of business energy, said if the increased energy costs for domestic consumers announced by DECC is applied to firms, it will seriously affect businesses.
The initial details of the much-awaited Energy Bill revealed today states energy suppliers would be able to pass on the cost for low carbon energy infrastructure to customers. This would mean an increase from this year’s £2.35 billion to £10 billion by 2020, which DECC estimated would add around 7% to consumer bills.
James Constant, Chair of EnergyForecaster.co.uk said: “The impact of these increased costs will be a serious concern for businesses if it is applied to them. While the exact rise to business energy bills is currently unknown, we predict the Energy Bill will continually push bills up for businesses over the next decade. Our most recent Business Energy Barometer showed that as many as up to 300,000 companies could go out of business if energy bills continue to rise by 15%/annum, which looks increasingly likely due to these increases.
“It is admirable that the government is trying to place a greater importance on environmental goals. However, in the face of economic difficulties, it is questionable whether this is the best way to do it when considering the possible negative impact on businesses in the UK.”
Price comparison site uSwitch.com said although it welcomes the clarity on the impact of future investments of household energy bills, the additional charges following the recent string of gas and electricity price hikes would be a “blow” to consumers.
Ann Robinson, Director of Consumer Policy said: “It’s important that consumers are made aware so they can take action to prepare for higher bills in the future and find information and support on how to limit the impact on their household. However, the fact remains that any additional cost on top of the hikes already seen will be unaffordable for many consumers. The average household energy bill today is already £1,334 a year and this is hurting people.”