Business Law & Compliance

What does the energy bill mean for SMEs?

4 min read

09 January 2013

Energy reforms will fall into place starting this spring - reason for business owners to limit their energy consumption today.

In late 2012 the government unveiled plans for its long-awaited Energy Bill – a package of reforms designed to help speed up the nation’s transition to low-carbon and renewable sources of power generation.

The upshot of it all is that while the government may have avoided a significant jump in energy prices in the longer term, there will still be smaller, short-term increases. This is because in order to pay for the transition towards renewable energy sources, the government must make a significant investment itself and so it needs to pass on some of the costs to end users through their energy bills. 

The reforms will steadily begin to fall into place over the coming years, starting this spring, so it’s important that business owners begin to take steps to limit their energy consumption soon, in order to offset the inevitable rise in costs.

A very simple first step is to conduct an audit of your lighting and standard electrical appliances to ensure that they’re as efficient as possible, making replacements where necessary.

Next, you need to give some thought as to how you can encourage behavioural change within their organisation to make sure things like lights and computers are turned off out of hours – simple habits which can have a significant cumulative effect on overall consumption. 

Appointing members of staff to become efficiency champions who then encourage their colleagues to improve their behaviour is one good way of spreading the message.
Though, as any business owner will testify, enacting cultural change is no mean feat, and in some cases technology might provide a quicker, if not more expensive, option. 

Automatic lighting systems are a good example for turning electric lights off when they are not needed without relying on busy employees to remember. Timer systems can also be used to ensure office computers, water coolers, televisions and other non-essential equipment is turned off at the end of the day.

Clearly, for some businesses the nature of their operation and the equipment they use will be far more energy intensive than in the average office. In these cases the potential for rising energy costs to have an impact on the bottom line are obviously much greater, and you should investigate whether there is a case for investing in replacements for older and more inefficient technology used on the floor. 

Aside from new kit, monitoring is another important factor. Regularly logging meter readings will give clarity on where the peaks and troughs of energy usage are. For multi-site businesses, it also allows performance comparisons to be made and less efficient sites to be prioritised.

Smart metering – where billing is based on actual usage – is a good idea, as accurate meter readings are reported to customers each month, empowering them with the knowledge they need to help make changes. Gazprom Energy smart meters around 70 per cent of our SME portfolio at present to ensure we are working off accurate and reliable billing data, reducing the need to forecast bills which then must be reconciled retrospectively. 

For its part, the government’s plans to help the private sector achieve these goals are on the way. The Green Deal for business launches in this year, offering loans to assist with implementation of green technologies, and a consultation on further incentives is currently being carried out.

Dale Marriott is head of UK operations at Gazprom Energy, who recently published a guide to the Energy Bill for SMEs.