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Escalating energy spend: are you getting the compensation you deserve?

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By Jessica Harris, carbon & energy consultant at Envantage

Rising energy prices are taking their toll on all businesses, but for energy-intensive industries the pressure is most acute. When wholesale market prices began to climb to unprecedented levels in late 2021, the pressure was simply too great for some companies, who were pushed to breaking point. Meanwhile, for those businesses that weathered the initial storm, the prospect of high energy bills remains. For some, this is further exacerbated by other cost increases that have arisen during the pandemic.

While this makes for a challenging outlook, there are opportunities for certain businesses to reduce the burden of significant energy costs.

Double whammy of rocketing energy prices and non-commodity costs

The surge in the wholesale market price of both electricity and gas comes at a time when green taxation and levies on energy bills (designed to accelerate investment into energy efficiency) are also significant. With prices growing to such significant highs this is creating a double whammy effect for UK industry.

For some time, the UK government has acknowledged the impact of these energy taxes and levies on industrial businesses – not least because it places a disproportionate burden on these companies compared to their EU counterparts and global competitors. To reduce the disadvantage this taxation poses to businesses who trade in international markets, the government has implemented various schemes to alleviate the pressure for certain eligible manufacturing sectors.

Time to look again at eligibility – have you secured all the savings you’re entitled to?

While these various compensation and exemption schemes can be difficult to navigate, they can deliver significant savings for those that are eligible – for some businesses these savings are often hundreds of thousands of pounds per annum.

So, with such significant savings to be made, there is a strong business case for not giving up at the first hurdle. And, right now, there are several key reasons to look again at your eligibility for compensation.

  1. Your income has dipped – escalating energy prices, combined with the impact of difficult trading conditions during the pandemic, may have affected your turnover. There are a number of schemes open to specific energy-intensive industries, where financial performance is integral to whether you can claim the relief.
  2. Changes in operations – your energy usage profile may have altered since you last checked your eligibility for scheme savings. It’s always worth a regular review as you may be able be entitled to something now that you didn’t qualify for previously.
  3. Changes to scheme rules are on the horizon – Some schemes are currently only available to a small number of industries or closed, however we do anticipate some changes to scheme rules which will open up opportunities for savings in the not too distant future.
  4. You might have been turned down previously by mistake – navigating these schemes isn’t always easy and we know from experience that many companies who can claim this relief have previously been mistakenly informed that they don’t meet the criteria.

Access a free review of your eligibility today

To ensure you’re not missing out on any potential savings, Envantage’s specialist team can provide a free desktop audit to identify if your business might qualify. Get in touch today to check your eligibility status.

Jessica Harris, carbon & energy consultant at Envantage

 

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