Challenges facing energy intensive businesses in 2023?
2023 promises to be an interesting year for energy intensive businesses with the Energy Bill Relief Scheme (EBRS) ending on 31 March.
The Treasury is reviewing a successor to the EBRS from 1 April, but fewer industries are expected to qualify for support meaning many more businesses will be exposed to the volatile wholesale power markets.
Current Winter23 wholesale prices are 22.3p/kWh for electricity and 7.33p/kWh for gas, which translates to around 33p and 8p respectively once transmission charges and non-energy costs are added. Winter23 has the potential to hit even higher prices. A lot depends on the ongoing Ukraine war.
The macro economic situation is that interest rates will increase to 3.75% and the media is doing its best to talk us into a recession (although on the ground it doesn’t feel like that). These, plus the volatility of energy prices, are going to make securing funding to invest in energy savings measures more difficult.
Add to this that ESOS round 3 audits have to be completed by 31 December and there is continued pressure to decarbonise. Government support for efficiency is in the long grass, not expected until 2026 at the earliest.
Our conclusion is there has never been a better time to invest in energy efficiency and on-site generation measures to defend your business from high grid prices, reduce risk and achieve your decarbonisation goals.
