“Ideally National Grid wouldn’t like to trigger this but if necessary they will and if they have to trigger it to avoid an emergency.”
“Energy intensive industries have to make some investments to be able to flex. The investments companies will make depends on how they will respond to this initiative.”
Factories could switch to diesel fuel, reduce their production or start using combined heat and power units to provide heat and electricity for less energy-intensive processes such as chemicals, paper and food and drink production.
UK ministers were warned that energy-intensive industries were at risk from soaring energy prices by PwC in November 2021.
The Treasury commissioned a report as part of “Project Shrine” and were told industries including chemical and fertiliser manufacturers were particularly at risk from the energy crisis.
Two-thirds of businesses were facing a jump in their bills over the next three months, with a third of those firms facing increases of more than 30pc, the CBI said.
Freezing business rates in 2023 would spare companies a double-digit increase next year. Rates are usually tied to September’s rise in the consumer prices index (CPI), which is expected to climb well above the 10.1pc rate recorded in July. It also urged the Government to give companies and the self-employed more time to pay their tax bills and provide easier access to pandemic-style loans to shore up their finances.
The CBI’s poll of almost 600 businesses also showed that while a third of businesses were trying to avoid passing on higher costs to customers, many had paused investment to cope with the price rises.
“While helping struggling consumers remains the number one priority, we can’t afford to lose sight of the fact that many viable businesses are under pressure and could easily tip into distress without action,” said Matthew Fell, the CBI’s chief policy director.
“Firms aren’t asking for a handout. But they do need autumn to be the moment that the Government grips the energy cost crisis. Decisive action now will give firms headroom on cash flow and prevent a short-term crunch becoming a longer-term crisis.”
