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The Jury Is Out On BEIS But Are We Any Closer To Long Term Certainty?

David Cockshott, Director at Inenco Group

If one thing has been certain in the energy industry over recent years, it’s uncertainty. The past two months alone have brought a flurry of change, from the Brexit referendum outcome to the whirlwind in Westminster of a new Prime Minister and the creation of a new government department, signalling the end of DECC and potentially creating greater integration between business and energy policy.

We recently conducted a survey of industrial and commercial energy users, inviting them to have their say on the changes. So what do businesses want from the newly formed Department of Business, Energy & Industrial Strategy?

The clue is in the name – a clear view on strategy!

Clear direction

In our survey, 80% called on government to provide the long term policy framework that would not only deliver infrastructure investment to alleviate security of supply concerns but would also enable them to plan ahead, from procurement strategy to budgets for energy reduction projects and beyond.

Whilst the creation of BEIS could be positive news at a time when billions of pounds are needed in infrastructure, the view from large energy users is mixed.

Over two thirds of business energy users stated that long-term certainty was extremely important to their business, with a common sentiment that “investors and the market must have confidence in the security of their investments and a clear indication of the future direction”, including engaging investors to prevent a post-Brexit hiatus.

Opinion was split over whether merging business and energy into one department would move energy up the list of strategic priorities.

A good merger?

Just under half of respondents (42%) stated their belief that energy would move higher up the agenda, with a more joined up approach to business energy but a third believed energy will suffer without a dedicated department.

One respondent explained, “without a single point of focus, this already confused policy area is likely to suffer further from under investment and under skilling”.

The need for a conclusion from the recent consultation on business energy efficiency taxes was also paramount: 71% were keen to find out what energy efficiency grants or incentives would be offered to businesses and 62% want government to focus on publishing its proposals for a single energy reporting framework due to be introduced in 2019.

Climate change

Climate change is also high on the agenda.

Outlining an approach to tackling climate change was seen as highly important by 46% of respondents, with over half of businesses fearing that the change would deprioritise climate change leaving it swept under the rug, whereas only a quarter believed it would ensure climate change is embedded into business strategy.