Member Article

How will changes to energy policy affect your business?

By Iain Walker, Head of B2B Sales, E.ON

The first few months of 2017 have seen several developments in energy policy which could significantly impact business now and in the future. The ability to adapt in a cost-effective way is essential but requires preparation; from applying for industry exemptions to allowing enough time to install energy-saving measures ahead of new regulations.

Three areas worth looking at in a little more detail are the effect of climate change policies on business costs, Brexit, and for landlords the countdown to Minimum Energy Efficiency Standards.

Energy Bills: The Committee on Climate Change recently reported on the impact of low-carbon policies on business energy bills and the potential for increased competitiveness from energy efficiency.

It found while low-carbon policies increase business energy prices, the impact on production costs for the majority is limited. This is thanks in part to improvements in energy efficiency but also the availability of exemptions and compensations, particularly for energy-intensive sectors. The findings act as an important call for businesses to take advantage of opportunities to improve energy efficiency which, the report says, could see potential savings of around 16% on electricity consumption for the commercial sector and 10-15% for energy-intensive manufacturing by 2030.

The report also highlights the potential in the UK moving to a low carbon economy. Lord Deben, Chair of the independent advisory panel, added: “The UK’s progress to reduce emissions … offer opportunities for future growth and employment while delivering vital action to tackle climate change.”

And solutions such as on-site generation can do more than reduce costs; flexibility in generation or demand reduction can play a part in balancing the grid, potentially generating new revenues from existing assets – either by generating income or avoiding charges during peak demand periods.

Solutions providers can optimise these technologies and help sell capacity to short-term markets. For one of our customers, a leading High Street retailer, our system provided remote monitoring, controls and optimisation at more than 300 sites across the country and we were able to help them to save more than £250,000 in peak period charges this year alone.

Energy Intensive Industries exemption: The government has announced plans to exempt energy-intensive businesses, such as those in the steel and chemicals industries, from a proportion of the costs of the Contracts for Difference scheme. This scheme is designed to encourage investment in low-carbon energy generation and is funded via a levy on energy prices.

The move is part of a wider commitment from the government, set out in its Industrial Strategy green paper, to minimise the cost to businesses of decarbonisation and builds upon previously announced exemptions from the Renewables Obligation and Feed-in-Tariffs – although we are still awaiting details about the tariffs.

Minimum Energy Efficiency Standards (MEES): MEES regulations come into effect from April 2018 and mean commercial landlords will not be allowed to renew existing tenancies or agree new lets for properties without an Energy Performance Certificate rating of ‘E’ or above. A recent E.ON study found more than a third of landlords and property managers are concerned about the impact of the regulations so it’s vital improvements are planned in good time to meet the deadline.

Clearly there’s no silver bullet for all types of buildings and industry sectors but by getting some expert advice from a trusted energy partner you can make your buildings work harder. At E.ON we have helped business customers with measures ranging from lighting and ventilation improvements to complete building energy management systems and combined heat and power units.

This was posted in Bdaily's Members' News section by E.ON .