Business energy support. London held the world’s attention in September 2022 for unfortunate reasons. Treasury growth announcements are continuing to have ripple effects on global markets. However, there was also a national energy relief plan for business … plus advice for struggling Lancashire companies.
History will mark the last month as being extremely difficult for many reasons. The death of a highly respected monarch in the middle of an unprecedented energy crisis and financial conditions not seen for nearly four decades has been exceptionally challenging.
And creates two priorities. One is to find or create strong sales opportunities in the UK and overseas. The other is to offer help to local companies being pushed to the edge by soaring costs.
Both are important to the East Lancashire Chamber of Commerce and its Low Carbon Programme (CLC). The support that we can provide is explained below. However, the key message from Chamber CEO Miranda Barker OBE is – take control of your firm’s energy now – cut your energy use AND look at how you can start to generate clean energy yourself if you can!
Key September and autumn developments, plus potentially positive carbon news, are also summarised later.
In memoriam … and looking to the future
We are saddened by the death of Her Majesty Queen Elizabeth II, but also note that environmental issues raised by King Charles III as Prince of Wales will be important throughout his reign. Many are also central to the CLC’s renewable energy and energy-efficiency goals.
Both the King and the current Prince of Wales (formerly Prince William) have accepted the new Government’s advice not to attend November’s international COP27 climate change summit in Egypt where the monarch as Prince Charles would have given a keynote speech.
Whether the government’s advice reflects a scaled-down commitment to environmental issues as reported widely, with a U-turn on fracking and further oil and gas exploration, is as yet unclear.
However, in an unusual diplomatic intervention, the Egyptian government – the COP27 host – has warned the UK against ‘backtracking from the global climate agenda’ because of fears about new UK Prime Minister Liz Truss’ commitment to net zero; it is not known if she will go to Egypt.
However, the new Prince of Wales, who made the environment a cornerstone of his royal work with the Earthshot Prize, is expected to continue to the open advocacy now barred to his father.
The Earthshot Prize, launched in 2020 by Prince William and Sir David Attenborough, will be awarded to five winners annually from 2021 to 2030 for environmentalism, and comes with a £1 million grant to continue their environmental work. The five categories inspired by UN Sustainable Development Goals are: – ‘the restoration and protection of nature’; ‘air cleanliness’; ‘ocean revival’; ‘waste-free living’; and ‘climate action’.
COP27 and CLC’s continuing role past 2023
The Chamber and CLC team will be represented at COP27, as explained in more detail in a moment.
However, this is a good time to mention that as CLC approaches the end of its first five-year mission in June 2023 to provide free advice, if you are a local business that wants to be more sustainable, please contact us now – Tel. 01254 356486.
But support will continue!
Message to businesses … cut your energy use NOW!
Energy regulator Ofgem has warned of a ‘significant risk’ of gas shortages this winter due to events in Ukraine. Some large industrial consumers could be asked to stop using gas temporarily to keep supplies ‘stable for households for as long as possible”’.
The National Grid will release its winter outlook report shortly. The good news is that winter should be milder than usual with average temperature between 5.20C and 5.70C.
However, many local companies feel they are already being pushed into bankruptcy and are asking the Chamber and CLC team for advice and support, explains Miranda.
“We are really worried whether many businesses can survive until spring. Our advice is don’t waste energy unnecessarily” she says. “Cut your energy use as your first priority. And DO IT NOW!”
“If you need help, contact us directly on tel. 01254 356486.”
The next priority, Miranda says, is learning how to invest in innovative technology that can increase energy-efficiency at relatively low costs – and understanding the payback periods involved. Again, the Chamber and CLC team can provide first-line professional help.
“We can also put you in touch with the best people to sort out your specific energy problems,” she adds. Her concerns echo those of Director General of the British Chambers of Commerce (BCC), Shevaun Haviland mentioned later.
Meet ENWL in person
You are also invited to an event CLC is holding with Electricity North West from 09:00 to 12:00 on Thursday 27 October for Lancashire businesses to learn more about reducing emissions and saving money in key areas such as switching to EVs, energy-efficiency and renewable energy.
‘Electric vehicles, renewables and energy-efficiency for business’ will take place at AMRC North West, AMRC Building, Roy Chadwick Way, Samlesbury Aerospace Enterprise Zone, Mellor Brook, Blackburn BB2 7HP
To join us, please click HERE.
Key UK announcements
Key global climate change event
Meanwhile, on a wider world stage, COP27 will take place at Sharm El-Sheikh, Egypt, from 7th to 18th November.
The goal is to reach agreement on issues not resolved at COP26 in Glasgow in 2021. Help to limit temperature rises to 1.5oC, finance, adaptation measures, and an African focus, will be on the agenda at the end of a year that has seen severe warming wind and flooding impacts around the world.
Possible silver linings
If there is a hidden bonus to the present energy crisis, it perhaps lies in innovation.
– Space-based solar power could help Europe reach net-zero – A new cost-benefit study led by the UK-based Frazer-Nash Consultancy with London Economics and the European Space Agency, shows that space-based solar power could bring Europe more than €180 billion, help reach net-zero, and reduce reliance on imported fossil-fuels.
The concept is to collect solar power in space using large satellites in geostationary Earth orbits, generate electricity in space, turn it into microwaves, beam these to a fixed point on the Earth’s surface, convert it back into DC power, and provide continuous base-load energy by the mid-2030s
A total of 54 solar satellites, each generating 1.4GW, would be needed, says the study.
– Switching to renewables could save trillions – Meanwhile, an Oxford University study concludes that renewable energy could save the world as much as $12 trillion (£10.2 trillion) by 2050, adding that it is wrong and pessimistic to say that transitioning quickly to cleaner energy sources is expensive.
Researchers say going green makes economic sense because of the falling cost of renewables, and going faster will save more money.
Fossil-fuel data over more than a century shows that, after inflation and market volatility, their price has not changed much. In contrast, the cost of renewables over the last few decades has fallen by circa 10% annually. Based on “probabilistic” modelling, the report expects this trend to continue.
– Energy-saving measures could boost UK economy – According to Cambridge Econometric, insulating homes and installing heat pumps could add £7 billion annually to the economy and create 140,000 jobs by 2030. But the uptake depends heavily on government policy, it says in a study commissioned by Greenpeace.
Through the boiler upgrade scheme, households can put up to £5,000 of government money towards a heat pump – roughly half the cost. But to qualify they must meet a high standard of home insulation for which average homeowners currently receive no government support.
Modelling used in the report suggests the Government will need to spend £4.2 billion in 2030 on supporting heat pumps and insulation. Households will spend £9.3 billion but save £11 billion in lower heating costs. A Government subsidy of circa £27.7 billion will be needed from 2022 to 2030.
– Defusing ‘carbon bombs’ could help tackle climate change – Carbon bomb are fossil fuel extraction projects, like coal mines, that can release more than one gigatonne of CO₂ emissions during their lifetimes – more than double annual UK emissions.
Researchers have counted 425 worldwide that could collectively release more than 1,000 gigatonnes of CO₂ – far exceeding the world’s carbon budget needed to keep temperature rises below 1.5°C.
The International Energy Agency says no new ‘bomb’ project can go ahead if catastrophic climate change is to be avoided. The taboo subject of leaving fossil fuel reserves in the ground was finally broken at COP26. But credible plans from governments to limit extraction are still needed.
– Heat pumps should be key to the UK’s energy strategy – New measures to keep UK homes warm and cut greenhouse gas emissions include an energy price cap and increase gas production but miss a vital opportunity to reduce household bills permanently.
Instead, according to the Regulatory Assistance Project (RAP), rather than focussing on the supply side – increasing North Sea production or fracking – a demand strategy should come first.
– Patagonia leadership – Yvon Chouinard, the billionaire founder of outdoor fashion brand Patagonia, has given his company to a charitable trust, adding that profits not reinvested in the business will go to fighting climate change.
The label has a cult following because of sustainability initiatives such as guaranteeing clothing for life and offering reasonably priced repairs; its adverting slogan ‘Don’t by this jacket’ asked shoppers to consider costs to the environment. The website now says, “Earth is now our only shareholder.”
Patagonia was founded in 1973 and 2022 sales are estimated at circa $1.5 billion. Mr Chouinard, who says he “never wanted to be a businessman”, has a reported net worth of $1.2 billion.
BCC chief also calls for emergency business grants
Director General of the British Chambers of Commerce (BCC), Shevaun Haviland, wants the Government to give the energy regulator Ofgem more powers, cut energy bill VAT, and introduce emergency business grants.
She told the BBC recently that BCC was “really delighted to hear the Government talking about helping businesses”, but added that “What we want to see is things that can be put in place quickly.”
“We’d like to see Ofgem given more powers to drive more competition in the market. We’re seeing nearly 50% of our members being moved off fixed rate contracts onto variable rate contracts,” she said.
She also quoted an example of a manufacturer whose bill has risen from £140,000 to £706,000 annually. “He has to sign a contract and doesn’t know how he’s going to pay it. That’s eye-watering increases and of course you cannot plan ahead,” she explained.
BCC wants to see a rapid VAT reduction on energy bills for businesses. “They currently pay 20%, we want that brought down to 5%,” she added.
High energy bills are making cash flow really difficult for businesses. “That means they can’t use cash to buy raw materials to make products even though they have a really strong order book. So they [businesses] need emergency grants quite quickly to help them keep the doors open.”
“We need them to get help through this winter,” the director general warns. Adding that there has to be a longer-term energy plan too.
Miranda Barker adds, “An even greater concern is ensuring that the Government energy support scheme actually does what it is meant to and save jobs.
“Our fear is that unless caps are put on standing charges too, energy firms will simply raise them to claw back profits they would otherwise have made from higher energy prices.
“Some local companies have already seen horrific increases,” she adds. “But it is something the Government can stop easily if it has a mind to. We have to make them listen!”
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