Businesses in the UK are becoming increasingly worried about energy security and believe the government’s aim of creating a “diverse energy mix” will avoid creating future supply problems.
A survey of of 3,500 businesses conducted by the British Chambers of Commerce revealed growing concerns over the availability and rising cost of energy in the UK, with some companies already reporting problems with disruption of supply.
The survey comes as the government prepares for the imminent publication of its long-awaited and controversial Energy Bill.
In all, 59% of large businesses, 44% of medium-sized businesses and 38% of small businesses taking part in the survey said energy security would become a “major concern” in the future.
Irregular supply is already an issue for some businesses, with 10% of the surveyed companies experiencing a cut in supply on five or more occasions in the past three years.
The survey revealed the government’s current policy of creating a diverse energy mix from a variety of renewable, low carbon and traditional fossil fuel sources was the favoured course of action among businesses with 90% of respondents supporting it.
Adam Marshall, Director of Policy at the BCC, said: “Secure energy supplies are vital for the future wellbeing of the UK economy. No business can succeed unless the UK has energy policies and an energy market that deliver affordability, certainty and security.
“Energy security is one of the most profound challenges facing the UK, and government energy policies require clarity and consistency to ensure that it meets the challenge.”
The political horse-trading over the Energy Bill has become heated in recent weeks, with the coalition apparently split over its content and the support it will give to renewables. Chancellor George Osborne is believed to be in favour of supporting short-term investment in new gas-fired power stations as a measure to keep energy bills down for consumers.
But Marshall warned against the danger of over-reliance on any single forms of energy generation.
“The UK should not find itself in a situation where it becomes more dependent on fossil fuels from overseas or on one technology at home. To create such a market, the government must provide more certainty for investors than it has in the past,” he said.
But businesses are also concerned at the prospects of their energy bills going up, with 40% of respondents saying rising energy costs have adversely affected their growth.
Marshall said there were concerns that when the carbon floor price comes into effect from April 2013, energy costs for businesses will increase, affecting their competitiveness.
“As the government embarks on far reaching reforms, it must also ensure that policy changes do not mean excessive costs for business. During a difficult economic time policies should not be considered that negatively affect the affordability of energy for businesses,” he said.
