Business
Five ways businesses can ensure long-term energy security, crisis or no crisis.
Published by Jessica Weisman-Pitts
Posted on October 31, 2022
6 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 31, 2022
6 min readLast updated: February 3, 2026
By Chris Bowden, Managing Director of Squeaky
On 8th September 2022, Liz Truss announced the government’s support scheme for businesses. In her statement, she stated that gas and electricity costs for UK businesses, charities and public sector bodies will be capped for six months.
The Department for Business, Energy & Industrial Strategy (BEIS) then announced that the scheme (known as the Energy Bill Relief Scheme) would be calculated based on a benchmark wholesale price for electricity of £211 per MWh and £75 per MWh for gas for the six months starting on the 1st October 2022, with the scheme applying to contracts signed since December 1st 2021.
The discount a business receives will depend on whether it is on a fixed or a flexible contract.
Certainly, this support is well and truly needed. After all, it will help to cushion the biggest and most volatile cost pressure facing businesses and without it, many firms would simply collapse, and jobs would be lost. That being said, we can’t escape the reality that this support package is an extremely expensive intervention and will cost billions. In fact, consultancy Cornwall Insight, estimated that the six-month relief alone will cost up to £25bn.
At the time of writing this piece, businesses are still in the dark as to what happens when the six-month cap runs out and without a doubt many businesses will still need financial support beyond this initial period. With that in mind, it’s likely the overall bailout for the energy crisis will be by far the biggest financial support package seen in history. So much so in fact, that the government’s support could stretch well beyond the billions pledged for the Covid furlough scheme. As a result, Capital Economics has forecast that the UK’s borrowing will hit £165bn, or 6.5% of GDP, in 2022-2023, rather than the £99bn the Office of Budget Responsibility (OBR) forecast.
And let’s be real here – there has to be a ceiling to the support. It’s unlikely this size of bailout will keep coming. With this in mind, it’s important that businesses of all sizes adapt their energy buying behaviour in the long-term to not only manage their energy costs and mitigate their risk, but also maintain their commitment to the climate. Here are five ways they can do just that:
Let’s be frank here; there is a real risk that businesses will treat the government bailout scheme as a get out of jail free card for their lack of prudence ahead of the crisis. But if business leaders operate under the proviso that they will always be bailed out, it’s unlikely they will exercise caution on such important matters in the future. And when it comes to the climate agenda, this simply just won’t do.
Certainly, the energy crisis is entirely out of businesses’ control. But corporate leaders should use this as a wakeup call and start to put in place processes and behavioural changes to ensure long term stability, whilst all the while being more climate conscious, too.
Energy security refers to the reliable availability of energy resources at an affordable price. It involves ensuring that energy supply is stable and can meet the demands of consumers.
Hedging is a risk management strategy used to offset potential losses in investments by taking an opposite position in a related asset. It helps protect against price fluctuations.
Energy consumption refers to the amount of energy used by individuals, businesses, or industries. It is a critical factor in managing costs and environmental impact.
Sustainability in business involves operating in a way that meets present needs without compromising the ability of future generations to meet theirs, often focusing on environmental and social responsibility.
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