Energy report: Business wants affordability over sustainability
Four out of five business leaders say energy affordability is important to their company, nearly twice the amount that prioritised a low-carbon economy.
The findings come from a YouGov survey of 600 senior business decision-makers, commissioned by npower.
In a similar vein, 58% of respondents said their firms would be ‘unwilling’ or ‘unlikely to be willing’ to increase their energy bills to fund low-carbon government schemes.
Specifically 73% said their business would be concerned about the possible cost implications of Contracts for Difference (CfDs), which could increase bills by 10% by 2020 according to Government estimates.
Contracts for Difference are essentially contracts that guarantee a payment in case of a market shortfall. If the price of electricity falls, for example, renewable energy generators will be compensated by the Government. CfDs are funded through a compulsory levy or obligation on energy suppliers, who pass the cost to consumers in their energy bills.
“We anticipate that CfD costs will begin to appear on bills from April 2015 at approximately £0.5/MWh, and this will increase on a quarterly basis to approximately £8/MWh by 2020,” said and npower spokesman.
Last week, the scheme was given a £95m cash injection.
With party conference season coming to a close, the poll also highlighted energy as a potential battle ground for Labour, only 22% of business leaders saying they are confident that current Government energy policies reflect their needs.
Npower head of industrial and commercial Wayne Mitchell said: “This survey has revealed just how sceptical businesses are about the effectiveness and impact of energy policies – the very policies that are going to have far-reaching and long-term impacts on their businesses.
“As political parties consider their energy manifestos, there is a clear case here for Government and the wider energy industry to work together to better educate businesses about the importance of these policy initiatives in securing the UK’s energy future and the competitiveness of UK plc.”