Businesses Who Fixed Energy Contracts in 2022 Face 133% Rise

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• Businesses Who Fixed Energy Contracts in 2022 Face 133% Rise

06 April 2023 | Updated 05 April 2023

Data suggests that businesses that fixed their energy contracts at the peak of the energy market last year could face up to a 133 per cent rise in bills from April.

Cornwall Insight has confirmed that the figures represent a worst-case scenario, but that it demonstrates how high wholesale prices at the time of fixing, combined with a reduction in government support, may leave some businesses with huge bill increases.

The reduction of support through the Energy Bill Discount Scheme meant that business energy support was scaled back significantly this year. The increase will seem more steep to those returning to market prices after fixing their bills at the height of the market.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight said: “The reduced levels of support offered to most businesses through the Energy Bill Discount Scheme are expected to have financial and operational implications for non-domestic consumers across the UK. It will be especially brutal for those that locked in fixed bills during the peak of the wholesale energy market, who will no longer be able to count on the safety net of government support to cap their bills at an affordable level.

“The reduced levels of support offered to most businesses through the Energy Bill Discount Scheme are expected to have financial and operational implications for non-domestic consumers across the UK. It will be especially brutal for those that locked in fixed bills during the peak of the wholesale energy market, who will no longer be able to count on the safety net of government support to cap their bills at an affordable level.

“The impact of EBDS on businesses is not uniform and will vary significantly across sectors. Energy-intensive industries that will receive additional support under EBDS may experience greater financial stability, while vulnerable businesses, some already struggling post-pandemic, may find reduced support levels and expensive fixed contracts a tough pill to swallow.

“The impact on business cash flows could also have knock-on effects in other areas, with constraints placed on their ability to invest in decarbonisation and Environmental, Social and Governance schemes, actions necessary to support the UK on its journey to net-zero.”

Picture: a photograph of a person holding a device which controls central heating. Image Credit: Unsplash

Article written by Ella Tansley | Published 06 April 2023

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