March 2 2015 Latest news:
Ben Woods, Business writer
Thursday, March 20, 2014
The chancellor has moved to ease the burden of high energy costs on industry and households by introducing a raft of measures that will bring nationwide savings of £7bn a year by 2018/2019.
In the budget, George Osborne said it will particularly benefit the most energy intensive manufacturers – around 80pc of which are based in the north of England, Scotland and Wales.
But the government estimates the packages could be worth as much as £369m to businesses in the east of England.
Measures will include a new compensation scheme to help energy-intensive industries with high costs sparked by renewables obligations and small-scale feed in tariffs for renewable generation.
The government will also cap the carbon price floor (CPF) at £18 from 2016-17 to 2019-20, which sets rising amounts for the carbon tax paid by electricity generators.
The government estimates that this could save British businesses up to £4bn by 2018-19 and over £1.5bn in 2018-19 alone – including £15 off a typical household energy bill in the same year.
Meanwhile, organisations which generate electricity from combined heat and power plants will be
exempt from CPF, which could help 15 sites in the east of England, saving as much as £257,000 in 2018-19 and helping major industries
such as British Sugar at Wissington, near Downham Market,
and the University
of East Anglia in Norwich.
Neil Wilson, head of energy and utilities at the UEA, said: “It is important that we maximise the limited resources we have and good quality CHP is an excellent example of this.
“The university has been producing electricity and heat through CHP since 1999 and we are delighted that this technology has been recognised as being of importance to the country.”
Gareth Stace, head of climate and environment policy at EEF, the manufacturers’ organisation, said: “The freezing of the CPF will translate into greater clarity for manufacturers’ energy bills through to 2020 and provide much-needed investment certainty.
“The Renewables Obligation compensation for energy intensive industries will also help to level the playing field these companies need to compete effectively with others around the globe and keep production here in the UK.”