This week, the Government announced a price cap on gas and electricity for all non-domestic energy users. The support is welcomed but it is a band-aid solution to a far bigger problem.
Gas will be capped at 7.5p/kWh (still 300% rise on pre-crisis rates); a trend that shows little sign of correcting itself. Electricity will be capped at 21p/kWh but note that this price doesn’t include the non-commodity costs (typically around 11p/kWh) meaning that the actual capped rate for electricity will be 32p/kWh.
The cap is only for 6 months. Energy intensive businesses must recognise the importance of not solely relying on government support and instead addressing the problem directly via energy efficiency and on-site energy generation. Even with these capped prices, payback for infrastructure upgrades is now much shorter.
For businesses who agreed a fixed price contract prior to April 1st, 2022, they are NOT eligible for the support package and therefore left to fight for survival on the rates they committed to.
Is the scheme just a deferral of the inevitable collapse for lot of businesses? The best course of action remains (1) implementing energy efficiency measures and (2) on-site generation.
If you would like to discuss how to implement energy efficiency measures, onsite generation or develop and roll-out a carbon reduction plan for your business, please contact David Kipling, CEO – On-Site Energy Ltd on 0151 271 0037 or email firstname.lastname@example.org. You can also contact our Strategic Account Manager, David Jamieson, on 07990787876 or email@example.com.
Details of the scheme: https://lnkd.in/e7bdP7T8