Manufacturers urged to be wary of sudden rise in energy bills

Many businesses will see their energy bills shoot up from April as government-funded relief is slashed, making low cost measures to improve energy efficiency even more important.

From 1 April, the government will replace its more generous Energy Bill Relief Scheme (EBRS), which has been in place since October 2022, with a new Energy Bill Discount Scheme (EBDS).

Although the new scheme guarantees energy bill support for a further 12 months, many businesses that qualified for the EBRS are unlikely to be eligible. The level of support available is also much lower – eligible businesses will receive a maximum discount of just 2p/kWh and 0.7p/kWh for electricity and gas respectively.

A small number of energy-intensive manufacturers will qualify for a higher level of support, but eligibility is limited to a narrow selection of SIC code sectors. More information on this higher level of discount is available on GOV.UK.

[Energy Bill Discount Scheme explained]

Industry experts are warning that the cut in relief puts hundreds of manufacturers across the country at risk.

The Confederation of British Metalforming (CBM), which represents over 200 manufacturers including sheet metal formers, forgers, fasteners and cold formers, has revealed that most of its members will not qualify for the higher level of support despite clearly being energy-intensive enterprises.

The organisation says it has been inundated with examples of companies facing energy bills rising to nearly 20 per cent of turnover, including one case where a manufacturer will see its bill increase from £600,000 per year to £4.2 million.

The reduction in support means taking measures to improve energy efficiency and reduce costs becomes even more crucial for manufacturing firms.

SME manufacturers in Lancashire can access expert advice to help reduce their energy consumption, including:

• One-to-one advice from energy efficiency specialists through our Sustainability and Net Zero Service, who are experts in their field when it comes to identifying and implementing opportunities to cut energy waste from buildings and processes – often at low or not cost
• Our expert Manufacturing Service can also provide tailored one-to-one support to take costs out of your business through lean measures to improve your productivity and profitability
• A set of introductory energy saving guides and recorded webinars are also available via our #HereForBusiness campaign.
   

For more information on the support available, contact one of our Manufacturing Advisors today.