Green energy solutions should be funded by Government, say businesses

Green energy news – by GreenWise staff

18th July 2011

Green and energy efficiency solutions that will help mitigate the risks of rising energy costs for businesses and help keep the lights on should be funded by Government, according to new research.

The npower Business Energy Index, an annual poll of 300 businesses, reveals that companies now view energy, and the risks associated with it, as their number one concern – above issues such legislation, security and health and safety.

Not surprisingly, giving recent price hikes by energy suppliers, costs were cited as the top concern, followed by energy security.

But the survey also revealed that businesses expect the Government to provide funding for green energy and energy efficiency solutions such as on-site generation and demand management technology to bridge the energy supply gap and keep the nation’s lights on.

When asked who should finance investment in self-generation, 61 per cent of businesses felt that the Government should pick up the tab – just 18 per cent believe it should be them paying for it.

Indeed, despite their concerns over energy risk, 62 per cent of businesses said investing in self-generation and demand management technology is not a business priority, with 51 per cent citing lack of finance as a barrier.

"While the Government is keen to support smaller companies through initiatives such as the Green Deal, the report shows that larger businesses believe the Government should also look at ways to help them," said David Cockshott, director of industrial and commercial markets at npower. "For instance, to mitigate risk and reduce instability through incentivising self-generation and demand management tools."

Energy price hikes

The cost of energy is going up dramatically in the UK as energy suppliers pass price increases in the wholesale market onto their customers. British Gas has just announced a rise in gas and electricity prices of 18 per cent and 16 per cent, just eight months after it raised its prices by seven per cent. Meanwhile, last month, Scottish Power announced it was raising its electricity and gas prices by between 10 and 19 per cent.
As a result, the npower poll found that those energy costs were businesses main concern, giving the issue a risk ranking of 6.6 out of 10. Next came security of supply with a ranking of 6.1. 

Energy management policies

Worryingly, though, the survey reveals that most businesses do not have a strategy to manage the threat.

According to the poll one in six major business energy users still do not have a policy in place. This compares to 91 per cent that have one in place for health and safety, npower said.

"It is worrying that while businesses have identified that risks associated with energy – from security of supply to cost – pose a real threat to their immediate and future operations, many have admitted to not having a strategy in place to manage it," commented Cockshott.

Alongside costs and security of supply, big energy users cited a number of other areas of high risk to their businesses. These include regulation in the energy sector, the subsequent impact on reputation, and ambitious carbon reduction targets.