The government's energy package may not be enough to save some businesses from closure, Norfolk bosses have warned.
Firms fear that the new measures outlined by ministers - to cap their gas and electricity costs for the next six months - could leave them facing soaring bills once the scheme ends.
Few details have been provided about what support will be offered beyond the initial six months.
The package announced this week will aim to cap the wholesale price of energy at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.
This will fluctuate for some companies if wholesale prices soar further than expected.
It will be implemented from October 1 and is available to businesses that have locked into contracts from April 2022.
Costs to rise by more than £1m
Claudia Roberts, CEO of the charity that runs Banham Zoo and Africa Alive, predicts that its costs will rise by more than £1m in the next 12 months.
"Even after this support package our energy costs will be triple what we originally paid and as a charity which is heavily reliant on energy to both operate and provide the optimum welfare for the animals under our care, we urgently need more support and more certainty than the six months offered by this support package," said Ms Roberts.
"As a charity we rebuilt our reserves following the pandemic and have been in recovery mode, which was supported by government grants.
"We now find ourselves looking at emergency measures again.
"Understanding the pressures on our own staff with the cost of living crisis, we are prioritising jobs within a rural economy but with costs rising by as much as £60k a month, it is equivalent to suddenly hiring 30 more full-time staff.
"We have to create skills and jobs in rural communities and support entrepreneurialism and innovation here in East Anglia, but if you squash small and medium sized businesses, we won’t be able to deliver anything - let alone innovation.
"This isn’t just a case of switching off a light or putting on an extra jumper, the financial crisis caused by the Covid-19 pandemic feels like it was a rehearsal for the crisis we’re now experiencing from the rising cost of living and energy prices.
"I can’t put giraffes in jumpers and we need to know what further support may be offered.”
Firms facing tough 12 months
Candy Richards from the Federation of Small Businesses (FSB) highlighted that many companies are facing harsher economic challenges now than during the pandemic.
She said that "the year ahead will be tough for many small firms".
“The subsidising of the unit costs of electricity and gas for six months is welcome, and it is positive that there will also be support for the many businesses in our region who are off grid and reliant on heating oil," Ms Richards added.
"However, there will be some businesses who fall between the cracks or find the support is insufficient to cover their spiralling energy costs."
Ms Richards warned that during 2020 alone 400,000 businesses were forced to close due to the pandemic and she is worried that the current crisis could see even more having to shut their doors.
She continued: “Although the government estimates that the support will cover up to half of the increase in energy bills from October, for many small businesses this will not go far enough. Many have seen a five-fold increase in their energy bills and are facing closure as a result.
“A further concern is that there is no mention of a cap on rises to standing charges, which are the other main element of energy bills. We therefore call on energy suppliers to support their small business customers by committing to lowering standing charges as far as possible."
"Too early to tell the full impact"
James Groves, managing director of Norwich firm Indigo Swan, which helps firms negotiate the best energy contracts, explained that although the support is "positive news for many businesses", it is too early to tell the full impact.
He added: "The fact that the government have stepped up, addressed the issue and provided a level of comfort for businesses over the winter months should be met with positivity.
"With that said, like many announcements before, it may take a few days, weeks or longer to fully understand and hopefully appreciate the impact this has on businesses over the winter months.”
How much will the cap save businesses?
Indigo Swan has provided approximate figures of how much the energy cap could save different types of businesses in Norfolk.
The company stressed that these figures are only a rough guide and do not take into account additional costs and charges such as transmission and distribution.
Restaurant in East Anglia:
Typical consumption 150,000 kWh PA – Half Hourly Meter
Approx 2021 unit rate: 17.655p/kWh
Approx 2022 unit rate pre-support: 43.100p/kWh
Approx 2022 unit rate post-support: 36p/kWh (21p/kWh wholesale + 15p/kWh third party costs)
Office in East Anglia:
Typical consumption 30,000kWh – Non Half Hourly Meter
Approx 2021 unit rate: 13.647p/kWh
Approx 2022 unit rate pre-support: 40.892p/kWh
Approx 2022 unit rate post-support: 36p/kWh (21p/kWh wholesale + 15p/kWh third party costs)
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