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Business energy: speech suggests freer market, easier switch

The UK energy business’s future was outlined by Amber Rudd, Secretary of State for Energy and Climate Change, covering suppliers, subsidies and more.

Speaking at the Conservative Party Conference in Manchester, Rudd promised an “affordable, secure supply of energy that our hardworking … businesses can rely on now and in the future”.

The ‘trilemma’ soon emerged in the form of the challenge of a long-term national energy policy that balances the need for cheap energy, the imperative to cut carbon and the energy security. A “root and branch review” of energy policies was promised.

Cheapest business energy

The focus of Rudd’s speech was on ensuring cheap business energy. As might be expected from a Conservative Government, the focus was on hydrocarbon energy sources. Rudd pointed out the transformative effect shale gas has had in the US. “[W]e support the safe development of shale gas in the UK, because gas is going to be part of the transition to a low carbon economy. It’s also good for jobs; it’s part of our plan to build the Northern Powerhouse and ensure the potential of all parts of the UK is realised; and it’s good for our energy security.”

Nevertheless, she was keen to counter perceptions of the Tories as against renewable energy: Rudd claimed that an average of £7 billion has been invested each year in UK based renewable electricity since 2010. “By 2020 we expect to get 30% of our power from renewable sources. We have solar panels on three quarters of a million roofs. With solar costs continuing to fall and new innovations in battery storage, renewable energy can stand on its own two feet. Indeed, the kind of transformation we need of our global energy system will only happen if low carbon energy becomes cheaper than the alternative.”

She also vowed to “back the businesses and innovators who will transform our energy system”, highlighting Strathclyde University’s work on shale wells; giant turbines designed for the North Sea; and Sheffield University’s Nuclear Advanced Manufacturing Research Centre work on the next generation of small modular reactors.

Indeed, the recent visit to China recently to push for international investment in nuclear infrastructure was specifically singled out.

Business energy suppliers

For UK small to medium sized businesses, the promise to “relentlessly pursue competition” may have most immediate impact. Rudd noted that the past five years have seen a proliferation of smaller energy suppliers, which are steadily taking market share from the ‘Big 6’.

“We want to ensure that we are doing everything we can to nurture competition so that it delivers cheaper bills and better customer service … [T]he biggest investigation into competition in the energy market since privatisation was triggered. We will implement the recommendations of the Competition and Markets Authority to help ensure that we have an energy market that works.”

Perhaps of most impact to SMEs was the claim that by 2018, people will be able to switch energy suppliers in 24 hours. However, with no specific mention of business energy, this could be confined to the consumer segment.

In the meantime, many small to medium sized businesses are missing out on lower energy prices. To compare business energy suppliers can take just 20 minutes: give us a call on 0330 0100 251 (or request a call back using our form).

Our dedicated pages have lots more information about business gas and business electricity.

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