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Rising Prices Have UK Small Businesses Evaluating Efficient Energy Transitions

UK energy
(Credit: Pixabay)

Rising energy costs have small businesses in the United Kingdom assessing how they use energy and what they can do to implement more efficient transitions, according to research from Novuna Business Finance.

Even with 45% of the business saying they don’t have a carbon offset plan in place, and almost a quarter saying they don’t have the budget to invest in sustainability targets, current energy demands have them looking at changes. Nearly 9 out of 10 respondents in a national poll of 1,027 small business owners say they are reviewing their energy practices.

Energy prices in the UK were expected to rise significantly after Britain’s energy regulator raised an energy price cap by 54% earlier this year. The UK’s energy regulator, Ofgem, specifically used high global gas prices for the increase, according to CNBC. In response, Ofgem says it is looking at the model for helping companies with less capital enter areas such as the renewable energy market as well as introducing a tougher approach to financial regulation.

The World Energy Council recently reported that international energy volatility has industry leaders expecting a slow rebound in the market, but they say it will lead to quicker transitions with investments in a diverse mix of energy uses. Last year the European Union pledged to ramp up renewable energy targets with a goal of using 40% renewables by 2030 instead of 32% in response to increasing gas and electricity costs.

Of the UK small businesses surveyed, 37% say they are shopping for less expensive energy deals and 34% say they have implemented plans to monitor energy use. Of those, 29% were already attempting to use less energy.

The businesses are looking at the supply chain and more when evaluating energy demands, according to the study. Of the respondents, 27% say they would stop using suppliers that attempted to pass energy costs on to them.

Only 12% of small businesses in the UK have accelerated plans to use green and renewable energy as well as reduce their reliance on fossil fuels, according to the survey. Businesses that are most likely to partake in renewable energy transitions include those in the transport, agriculture, and media sectors.

Regionally, businesses in Scotland are the most likely to pursue green energy transitions, with 18% of businesses there saying they were going to accelerate their move to renewable options. Additionally, 44% of small businesses in Scotland say they are looking to switch to less expensive energy suppliers.

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