Energy moves up the agenda for SMEs

As prices continue to rise and a secure, reliable supply becomes less of a certainty, small business is turning its attention to energy issues - and hoping the energy review will not leave it out in the cold.

Power to the people: small businesses are making themselves heard in the energy debate

Power to the people: small businesses are making themselves heard in the energy debate

According to the Federation of Small Businesses (FSB) smaller firms have the flexibility and initiative to try something new when it comes to meeting energy demands and improving efficiency - but they need expert advice to ensure they are doing the right thing.

With the Government's Energy Review bringing energy issues sharply into focus, the FSB is urging politicians not to ignore its members' needs.

"Energy never used to be a top priority for smaller firms, but now it is a big issue," Matthew Knowles, spokesman for the federation, told edie.

But Russia's decision to stop the flow of gas to the Ukraine in the spring was a wake up call for managers who had grown up with a cheap, secure supply of electricity, he said.

"That had a huge impact on energy prices and a knock-on effect on small businesses," said Mr Knowles.

"The bubble still hasn't burst and prices haven't come back down."

The FSB would like to see a secure energy supply that does not depend entirely on foreign suppliers, a reliable system that can guarantee to meet the needs of business whatever time of year and in any weather conditions through a broad energy mix and a new regime to ensure small businesses are protected in a similar way to domestic energy users.

It also wants to see changes in the planning system to allow speedier construction of new power production plants - from wind power to nuclear energy.

Mr Knowles said most small businesses would also be open to the idea of on-site energy generation and improving efficiency but often lacked the expertise and specialised staff needed to take the first steps.

"Small businesses are actually quite flexible and can make these kinds of decision quite quickly," he said.

"But they need reliable advice so they know what's right for them. They might try to get a wind turbine then find it difficult to get planning permission because of the location, for example, but solar panels might have been right for them."

Government needed to balance the need for information with swamping small business with myriad agencies offering help, which can lead to confusion about where to go for advice on a specific topic.

It would be far more useful to provide energy advisors at an established information outlet like Business Link or NetRegs, said Mr Knowles.

Neither are small businesses looking for handouts, he added, and if they are given sound economic arguments they will likely be happy to take steps to reduce energy use and emissions.

"Small firms want to do their bit but they need to hear the arguments in favour of putting in energy efficiency measures or clean energy," he said.

"If a firm can see that over the long term it will save money and the investment will pay for itself they'll be very open to that. Most are realistic about short-term expenditure if they can see the benefits down the road, but if there's no sound business reason they won't do it.

"We accept that clean energy is a priority but you cannot ignore the economic side of things.

"We do appreciate there's an agenda for cleaner energy out there but it needs to be balanced against affordability, security of supply and reliability."

The membership was split on the nuclear question, said Mr Knowles, and a recent debate had seen support and opposition roughly equal within the ranks.

"We need reliable energy and we need clean energy, so maybe nuclear has a part to play in that," he said.

"But what we really want is for the Government to consider all the options and decide on their merits, not some hidden agenda."

John Holbrow, FSB national environment chairman, added: "Energy issues are rapidly rising up the agenda for small firms. Increased costs and deteriorating service means that more and more of our members recognise that action must be taken soon to secure our energy supplies at affordable prices. The Energy Review is not a moment too soon.

"To complement new energy provision the Government, together with suppliers, must mount a comprehensive and targeted campaign to promote energy efficiency measures that SMEs can easily apply to their businesses.

"This should be developed in tandem with practical support and clear examples of how small businesses can maintain and improve profitability through energy savings.

"We need tough, realistic decisions to be made on power provision from all sources. From power stations that create energy using coal, gas and nuclear energy through to new renewable technologies - the only thing that counts is which mix can bring reliable, cleaner, secure and affordable energy to British small businesses."

Sam Bond



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