The Federation of Small Businesses has called on Ofgem to address the escalating standing charges faced by small firms, highlighting the potential financial strain on many.

The Federation of Small Businesses (FSB) has increased pressure on Ofgem, calling for prompt action to tackle rising standing charges affecting small firms nationwide.

The FSB’s concern stems from the financial strain on small businesses, worsened by substantial increases in fixed charges, regardless of energy usage.

In a letter to Ofgem Chief Executive Officer Jonathan Brearley, the FSB outlined the negative impact of rising standing charges on small businesses.

This plea follows earlier correspondence from Energy Secretary Claire Coutinho and Minister for Affordability and Skills Amanda Solloway, highlighting the government’s commitment to fair energy bills for all consumers.

According to the FSB, small businesses, particularly those in rural areas, are hardest hit by these rising charges, exacerbating urban-rural disparities and hampering efforts to level up remote regions.

Standing charges, covering network infrastructure and operational costs, pose challenges for small businesses trying to understand utility bills.

Unlike household consumers, small firms lack protection from energy price caps, leading to suspicions of unjustified cost increases by energy suppliers.

FSB’s Policy Chair, Tina McKenzie, commented: “We want Ofgem to do a thorough review of standing charges for businesses as well as consumers, for better transparency and to discern whether energy companies are behaving fairly towards their small firm clients.

“Small business energy customers behave in a way more akin to consumers than big businesses, lacking the resources, the expertise and the buying power necessary to get the best possible deal out of their energy suppliers.

“However, they do not benefit from anything like the same level of protection as that rightly available to households, leaving them caught between two stools.

“Many small businesses could be forgiven for suspecting that they have been seen as something of a soft target for price hikes in their standing charges, and they do not have a full picture of where the money they pay on a daily basis is going – something that needs to change.

“Small firms were put through the wringer by the energy price crisis, which sadly spelled the end for many otherwise viable businesses who saw their utility bills become completely unmanageable.”

An Ofgem spokesperson: “We are assessing the standing charge system overall including tackling issues faced by non-domestic consumers. We are grateful for FSB for responding to our consultation and we are looking at its ideas.

“We agree too many businesses get unexplained price hikes from suppliers or are ripped off by brokers – that’s why we’re putting tough new rules in place from July to resolve disputes and get greater clarity on fees.

“We published a detailed non-domestic market review last year – and are working with ministers, industry and businesses on the additional price protection and bill transparency they’re calling for.”

Simon Askew, Managing Director at Business Energy Direct, said: “Further to the recent article regarding the soaring cost of standing charges, which has been published by multiple mainstream media outlets, Business Energy Direct is disappointed with the comments, from Ofgem which are damaging to reputable brokers and third-party intermediaries.

“Ofgem’s poorly considered comments come off the back of the FSB highlighting concerns regarding excessive increased costs on behalf of their members and small businesses, concerns that Business Energy Direct share, having repeatedly contacted Ofgem regarding the impact of P272, P432, Market wide Half Hourly Settlement (MHHS) and Targeted Charging Review (TCR).

“All of these poorly considered industry changes were approved by Ofgem, despite opposition from the supply industry and other stakeholders, with TCR being the most recent of the changes to be implemented, and the noticeable increases can be directly attributed to it.

“When announcing the decision to approve TCR, Ofgem stated  “We have decided to make changes to the way in which some of the costs of the electricity networks are recovered, so that the ‘residual charges’ are recovered more fairly now and, in the future”.

“Following the request for comments to the recent article, Ofgem had the opportunity to educate the public about the industry changes that they approved, in particular TCR, but instead they decided to make defamatory comments against a sector of industry that doesn’t make policy decisions,  one which had nothing to do with the issues the FSB highlighted.

“Despite evidence of poor supplier practices, which on occasion have been identified as introduced deliberately for the benefit of the supplier, and the circa £500 million fines issued to suppliers following enforcement action, Ofgem has refrained from using derogatory and inflammatory language when providing comments to the media in the past.

“The majority of brokers and TPIs work incredibly hard to protect the interests of the millions of business customers that they work with, despite the poor performance of our industry regulator, and we believe that Ofgem should retract or amend their comments accordingly.”

 

RenewableUK, in collaboration with key industry stakeholders, unveils a comprehensive Industrial Growth Plan aimed at tripling offshore wind manufacturing capacity over the next decade.

The UK’s offshore wind sector is preparing for significant expansion with the introduction of an Industrial Growth Plan (IGP) by RenewableUK, the Offshore Wind Industry Council, and The Crown Estate.

This plan outlines strategies to triple offshore wind manufacturing capacity over the next decade, positioning the UK as a prominent player in the global offshore wind market.

Already a significant contributor to the UK economy, the offshore wind industry employs 32,000 individuals and each new large offshore wind farm adds £2-3 billion to the economy.

The IGP forecasts a surge in employment to over 100,000 by 2030, with investments in new offshore wind projects expected to create an economic opportunity worth up to £92 billion by 2040.

Central to the IGP’s success is its aim to accelerate offshore wind deployment in alignment with the UK’s net zero targets, targeting a capacity of 5-6GW per year.

Currently, the UK boasts the second-largest global pipeline of offshore wind projects, with nearly 100GW in various stages of development – six times the country’s current capacity.

The plan addresses critical supply chain constraints and identifies strategic opportunities for investment in manufacturing capabilities.

It focuses on five key technology areas, including offshore wind blades, turbine towers, foundations, cables and other essential components and services.

Additionally, the IGP emphasises the potential for technology innovation, with plans to incorporate automation and AI technologies to further reduce environmental impacts.

To mobilise funding for the IGP, RenewableUK anticipates an investment of nearly £3 billion nationwide, with private finance playing a significant role. It is estimated that for every £1 invested, the plan will yield a return of just under £9 to the UK economy.

Looking ahead, industry stakeholders are set to establish an IGP Delivery Body to govern and implement the plan effectively.

Energy Security Secretary Claire Coutinho said: “Britain’s windswept shorelines give us a competitive advantage in the global race for energy. That’s why, since 2010, Britain has been second only to China in building new offshore wind.”

RenewableUK’s Chief Executive Dan McGrail said: “The UK will need three hundred giant turbine towers every year for offshore wind projects between now and 2030 to deliver government targets.

“The plan charts a clear course for us to ensure that we seize that massive economic opportunity and maximise our opportunities to manufacture those towers here, along with more blades, cables, foundations and a whole range of other products.”

Gus Jaspert, Managing Director, Marine at The Crown Estate, said: “As an early action, The Crown Estate is establishing a £50 million Supply Chain Accelerator to catalyse early-stage investment, with an initial £10 million pilot fund launching this summer to support supply chain opportunities created through the Celtic Sea Leasing Round 5 and a further £40 million earmarked aligned to the IGP.”

Deployments in 2023 nearly tripled from the previous year and forecasts anticipate further significant expansion in 2024, according to a report.

The global energy storage market is witnessing a significant surge, with deployments in 2023 tripling compared to the previous year and forecasts anticipate continued growth in 2024.

That’s according to the latest report by BloombergNEF, which suggests China leads in installations driven by co-location mandates, while activity intensifies in regions like the US, Australia and Europe, supported by targeted government initiatives.

Projections indicate substantial growth with a compound annual rate of 21% until 2030, primarily fueled by mandates, subsidies and declining costs.

According to the report, annual additions are expected to reach 137GW/442GWh by 2030.

Asia Pacific leads in capacity expansion, followed by Europe and the Americas.

New report indicates that currently only 12% of wind and solar farms in the UK are co-located with energy storage facilities.

A new report by RenewableUK suggests that integrating energy storage projects with onshore wind and solar farms can significantly reduce electricity system costs and enhance energy security.

The report, titled “Making the most of renewables: the role of onshore co-location in accelerating an integrated energy system,” emphasises the potential benefits of co-locating battery storage and green hydrogen projects with renewable energy generation sites across the UK.

According to the report, such co-location could streamline the planning process and reduce costs associated with building and operating battery storage projects.

This approach could save time and money by utilising existing grid connections and sites with planning permission.

RenewableUK’s EnergyPulse database indicates that currently only 12% of wind and solar farms in the UK are co-located with energy storage facilities.

However, the report suggests that this percentage could increase significantly in the coming years to meet rising electricity demand, provided that the right policy framework is established.

The report recommends measures such as clearer rules and regulations for co-location, streamlined planning processes and improved resource allocation for planning authorities to expedite decision-making.

Ofgem has released guidance for RO, FIT, REGO and SEG scheme participants considering co-locating storage facilities.

Ofgem has unveiled guidance for participants of the Renewables Obligation (RO), Feed-in Tariffs (FIT), Renewable Energy Guarantees of Origin (REGO), and Smart Export Guarantee (SEG) schemes contemplating the co-location of electricity storage facilities with accredited renewable generation installations.

As the energy system shifts towards decentralisation, operators of renewable generating stations aim to co-locate storage facilities, although legislation under RO and FIT schemes doesn’t explicitly address storage.

Ofgem asserts that, if scheme requirements are met, storage deployment alongside accredited generation can remain valid, but cautions on potential impacts on support eligibility.

Four principles are outlined for operators considering co-location, with guidance stressing the need for independent legal and technical advice before making changes or investment decisions.

Britain’s energy regulator said: “It is possible that co-locating storage may impact the eligibility of an accredited RO generating station or FIT installation to receive continued support under the schemes, or may alter the amount of support received.

“Generators should consider carefully the requirements of the scheme to ensure their proposed configuration does not adversely affect their ability to receive support under the schemes.”

A recent survey conducted indicates a growing emphasis on reducing greenhouse gas emissions among small and medium-sized enterprises in 2023.

In recent findings, small businesses are increasingly prioritising action on climate change, according to a survey conducted by the SME Climate Hub.

The survey, spanning 44 countries and 25 sectors, revealed a notable uptick in the importance placed on reducing greenhouse gas emissions among small and medium-sized enterprises (SMEs) in 2023.

Despite this growing emphasis, the study also highlighted persistent obstacles hindering climate action within SMEs.

Regulatory pressures and evolving customer expectations are driving SMEs to elevate climate action as a priority.

The survey noted that 44% of respondents reported a heightened focus on reducing emissions over the past year, with an additional 53% maintaining a consistent level of prioritisation in this area.

However, despite these intentions, SMEs continue to encounter barriers that impede their ability to effectively address climate change.

Among the key challenges cited by surveyed SMEs are a lack of supportive policies or government-backed incentives, identified by 52% of respondents and insufficient funding, also reported by 52% of those polled.

Additionally, nearly 39% of respondents highlighted a dearth of data on current emissions as a significant barrier.

Other obstacles include time constraints, noted by 29% of respondents, and perceived deficiencies in skills and knowledge, cited by an equal proportion of SMEs.

María Mendiluce, Chief Executive Officer, We Mean Business Coalition, Co-Founder of the SME Climate Hub, said: “In order to transition to a clean and just economy, we cannot leave behind small businesses and the communities they serve.

“Small businesses are the nimble changemakers we need to push climate action forward, but we need an all-of-society approach that enables this action.

“Support mechanisms from governments and incentivising programmes from partners such as financial institutions and corporate supply chain leaders are essential to enable small businesses to take more comprehensive action.”

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Researchers have pinpointed new onshore wind and solar sites across England, utilising less than 3% of land, potentially increasing clean energy output by 13 times.

Researchers have identified promising new locations for onshore wind and solar projects across England, suggesting the country could significantly boost its clean energy output.

According to recent analysis, approximately 374,900 hectares of land, equivalent to 2.9% of England’s total land area, are deemed highly suitable for renewable energy projects.

Areas such as North Yorkshire, Lincolnshire and the East Riding of Yorkshire are highlighted as prime locations for potential development.

Researchers from Exeter University’s Environmental Intelligence Centre and Friends of the Earth have pinpointed 219,800 hectares of land ideal for new onshore wind projects and 295,000 hectares suitable for potential solar sites, with some areas suitable for both.

Tony Bosworth, Climate Campaigner at Friends of the Earth, said: “Unleashing the UK’s immense potential to generate cheap, clean homegrown renewables is essential to bring down our energy bills for good and meeting the UK’s vital international target to reduce carbon emissions by two thirds by 2030.”

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Small businesses in Britain will now have access to free redress and assistance from the Energy Ombudsman to resolve energy contract disputes.

In a move aimed at supporting small businesses and tackling unfair energy practices, the government and Ofgem have introduced measures to provide free support for energy disputes.

Small organisations with fewer than 50 employees will benefit from access to the Energy Ombudsman, empowering them to resolve issues with their energy suppliers without incurring costly legal expenses.

Energy Affordability Minister Amanda Solloway emphasised the government’s commitment to standing by British businesses, announcing plans to consult on regulating energy brokers and intermediaries later this year.

Minister for Affordability and Skills Amanda Solloway said: “All businesses deserve to get a good service from their energy supplier – and today’s changes will empower small businesses with free redress support via the Ombudsman.

“This is just the beginning. Rip-off energy brokers have no place in our market and we will act to raise standards for customers.”

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The energy regulator has announced new regulation ensuring fair treatment, better dispute resolution and transparent fees for businesses in the non domestic energy sector.

Ofgem has introduced new measures to protect businesses in the non domestic energy sector, aiming to improve customer service and transparency on broker fees.

The changes, effective from 1st July 2024, extend Standards of Conduct to all businesses, empower Ofgem to act against unfair treatment and require suppliers to direct micro business consumers to advisory services.

Further updates, anticipated by year-end, include displaying broker fees in contracts and enhancing Complaints Handling Standards for small business consumers.

The reforms follow concerns raised about high energy prices and poor service, identified through a joint investigation with the Department for Energy Security and Net Zero.

Tim Jarvis, Ofgem’s Director General for Markets, said: “Too many businesses have experienced issues with some energy suppliers, from difficulty getting the right contracts, unexplained price hikes, and poor customer service.

“We’ve worked hard to understand the breadth of issues and where the powers we have to tackle them can be improved. These new rules will help ensure businesses get the service they deserve.

“We will be speaking to businesses of all sizes as these rules come into force throughout this year to make sure they are being followed by suppliers. We will also continue to work with government, industry, and consumer groups to see what else can be done to support non-domestic consumers.”

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The assessment by a think tank emphasised ten areas for action outlined in the Government’s 2022 strategy, covering aspects, including energy efficiency, grid operations, offshore wind and nuclear power.

Analysis suggests that the government has only fulfilled three out of ten commitments it made two years ago to enhance the UK’s energy security.

The Energy and Climate Intelligence Unit (ECIU) conducted an analysis revealing shortcomings in the UK Government’s energy security commitments.

The think tank suggests that the government has only achieved three out of ten major targets outlined in its strategy, two years after the publication of the British Energy Security Strategy.

According to the report, key areas of concern include offshore wind farm auctions and heat pump policies, where the government has failed to meet targets.

Despite commitments, only two new offshore wind farms have been secured since the strategy’s inception, with none secured in the last auction in 2023.

Delays in implementing the Clean Heat Market Mechanism have also hindered efforts to bolster heat pump adoption, the ECIU suggests.

In addition, analysts argue that the government’s focus on expanding North Sea oil and gas drilling may not yield significant benefits.

Commenting on the analysis, Jess Ralston, Energy Analyst at the ECIU, said: “The UK has had two energy security strategies within two years and we’re still going backwards, becoming more dependent on foreign imports.

“As a country, we have spent more than £100bn on gas over the crisis with the bill payer and taxpayer bearing the brunt.”

A Department for Energy Security and Net Zero spokesperson told Energy Live News: “We do not accept these claims.

“Since we published the British Energy Security Strategy we have allocated billions to improve energy efficiency, announced a dedicated record pot of £800 million to back offshore wind projects and increased our heat pump grant to £7,500 – making it one of the most generous schemes in Europe and helping families with costs.

“We have achieved all this while maintaining one of the most secure and diverse energy systems in the world, with renewables now accounting for nearly half of our electricity – up from 7% in 2010 – while backing a domestic oil and gas supply and ending the stop-start approach to nuclear.”

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