Caught in the crossfire on energy reforms

Businesses are already facing a wide variety of energy legislation, from the CRC Energy Efficiency Scheme to Feed-in Tariffs. In addition to this, the Government has recognised that the UK electricity market needs to change fundamentally over the coming years as demand increases and supply changes. Electricity Market Reform aims to address the challenges facing the energy market, with wide-reaching reforms designed to attract the substantial investment needed in low carbon electricity, while also achieving the Government’s objectives on security of supply and affordability. npower fully supports the objectives of the EMR proposals, and recognises the need for the UK to have a modern and efficient energy infrastructure with a diverse mix of technologies to ensure our economy can grow and compete globally. However, there are a number of concerns raised by businesses feeling caught in the crossfire of policy discussions on the future of the UK energy market.

The voice of business

Since EMR was announced in 2010, npower has been listening to businesses’ views on the legislation and feeding them back to Government, to ensure their voices are represented in key EMR consultations. To date, npower has hosted four customer and stakeholder roundtables on EMR, conducted its own ‘consultation’ to ensure time-poor businesses had their say during the process, and presented its findings to Government at every stage as part of RWE’s membership of all of DECC’s Expert Groups for EMR. 

During this ongoing process, businesses have continued to raise concerns about the impact EMR will have on their operations. As a result, we launched ‘EMR Explained’, an initiative designed to help educate industry on EMR and continue to give it a voice in the ongoing consultations around EMR’s design. As part of this initiative, we consulted further with major energy users through our ‘EMR Pulse’ survey and found that almost all (97%) are worried about how EMR will affect the cost of their energy. Further to this, 91% are worried about the ability to forecast costs and 86% of businesses highlighted the impact on UK competitiveness as an area of uncertainty. 

In particular, businesses are worried about cost certainty, and want more information from Government on how each part of EMR will impact businesses in terms of financial and administrative cost. Businesses also want greater transparency on how EMR schemes will operate, with further details on how costs will be set and markets regulated. Finally, we know companies want a system with longevity so the scheme is not affected by changes in Governments within short-term parliamentary cycles.

As such, the recommendations we have submitted to Government on behalf of businesses include the need for cost and affordability to the consumer to be given due consideration paramount importance through the ongoing consultations on EMR.

The Government published updated EMR policy and corresponding consultation plans in October 2013, which provided an element of greater clarity, but many businesses still say they need more information on the specifics of the scheme and how it will impact them – to provide certainty, particularly for those making long-term investment decisions.

Solutions for success

While many details of EMR are still to be confirmed, a key practical means of ensuring your business is well prepared for its impact – in whatever form it takes – is good energy management. Measuring, monitoring and minimising energy use are the key steps organisations can use to help take control of costs. As many shrewd energy users know, the cheapest form of energy is the energy you don’t use, which is why npower has worked in collaboration with companies to develop a range of innovative energy-saving solutions that respond to their needs.

For example, tools such as npower’s encompass Bureau, can help businesses of all sizes on the path towards better energy management. By providing access to expert energy analysts who monitor energy consumption and identify areas of potential wastage, encompass Bureau removes the need for time-constrained managers to monitor energy consumption themselves. Once identified, npower can then help businesses to implement the energy saving actions needed to reduce their energy consumption – helping to save time and money.

To secure the country’s power future, it is clear that EMR’s impact on the UK energy landscape will be considerable. But, while we are at a critical stage of economic recovery, the impact on industry is something that needs to be given prime consideration, which is why npower is continuing to work with organisations to give them the support they need in both understanding and managing EMR. To find out more how npower is giving businesses a voice on EMR, get in touch at  HYPERLINK "mailto:[email protected]" [email protected] or visit  HYPERLINK "http://www.npower.com/business" www.npower.com/business.