Energy costs have overtaken the recovery from Covid-19 as the top concern for UK businesses, according to a new report released today. Four in five every five industrial users say the Johnson administration should be doing more to help them navigate the crisis.
npower Business Solutions’ Business Energy Tracker asked 200 large organisations about the impact of the energy crunch on their confidence to invest in decarbonisation, as well as how they are managing energy risk.
The research showed that 77% of businesses say energy is now their biggest concern, followed by the ongoing recovery from Covid-19 (72%).
With nine out of 10 predicting the cost of energy to their business will increase over the next 12 months, 80% of businesses reported that energy is now a major board-level issue.
Businesses are now urging Government to respond with measures. A huge 82% of businesses believe more needs to be done in terms of policy and incentives to protect them from the impact of the energy crisis. Over one in five 21% damn Johnson’s ministers with their belief that nothing is being done at all.
nBS head Anthony Ainsworth observed: “Businesses are currently facing huge challenges, and are emerging from two years of upheaval into even more uncertainty.
“Rising inflation, the reduction in government pandemic support and increased energy market volatility are all having an impact on confidence.
“While some progress has been made, the message coming through loud and clear from nBs’ research is that current policy is not doing the job it needs to do to support businesses at a time when energy is their biggest concern.
“What we are hearing is that certainty and with it, investor confidence, is in short supply.”
More than half (55%) of the 200 firms surveyed say that measures such as energy efficiency and management would head their investment agenda in the coming twelve months.
Ainsworth added: “While it is encouraging to see that many businesses are being ‘masters of their own destiny’, we also need to see strong leadership in government to grasp the nettle of challenging but important change that could radically alter the way industry interacts with energy in Britain.
Calling for ministers’ actions yielding immediate results, the nPower Business boss identified as quick wins the electrification of heat and transport, and a renewed drive from Whitehall towards curbing demand through energy efficiency.
Net Zero will harm the operations of nearly half – 49% – the firms quizzed, the survey found. Two thirds believe the goal is achievable by the government’s 2050 deadline. But 93% were concerned about the cost impact of funding the low-carbon transition.
nPower’s Ainsworth warned Government inaction is leading businesses to lose confidence in Net Zero.
“This research shows that businesses back Net Zero, and they recognise the environmental, commercial and reputational benefits it can bring”, he said.
“However, the current pressures mean that confidence is starting to wane. If the Government wants to keep the support of businesses to help them achieve their net zero targets, then they need to intervene now with policies to support them.”
The survey was conducted with energy managers between February and April. Seven CEOs were later interviewed in depth. The full report is here.