Energy Bill Relief Scheme: How will it affect hospitality?

By Tom Tanner, Sustainable Restaurant Association

Large or small, hospitality businesses of all sizes have been seriously rattled by the soaring energy price rises of recent months and the threat of more to come. The prediction this week from Fuller’s that it’s total annual bill for gas and electricity would leap from £8m to £18m was truly sobering.

Smaller operators are feeling the heat too. The Bay Fish and Chips in Stonehaven, Aberdeenshire, recently found out its supplier was bumping up monthly demands from £900 to £3,100.

So, the announcement by the Government of its Energy Bill Relief Scheme will have come as a massive relief to all. With wholesale prices effectively capped for six-months at £211 per MWh for electricity and £75 per MWH for gas and an expectation that this relief will continue for vulnerable sectors like hospitality, most have welcomed the news.

Calum Richardson, owner of The Bay, said that while all help was appreciated, he’s at loss to know what more he can do to reduce consumption, short of shutting up shop when it’s quiet.

“It is really tight and there is a limit to what more we can do. We use renewable energy, have installed efficient fryers and obviously changed the bulbs. I’m thinking now that we might have to reduce out opening hours.”

Currently The Bay is open seven days a week 12-8pm but Calum is considering reducing that to four or five days a week. “I think we are all in for a serious shock this winter,” Calum added. “We only cook to order as it is, but I think we might have to really strip back to basics to save energy. Every day my tills tell me that prices are going up.”

A portion of fish and chips at The Bay was £8.90 a year ago. It’s £9.90 now, and that, Calum says, doesn’t anywhere near pass on the rises in fish, potato and oil prices he’s facing. “We’re going to have to put the prices up again very soon, because if we don’t then we’ll be faced with a bigger rise further down the line that our customers really won’t like.”

At the risk of turning every reader green with envy, Neil Forbes of Cafe St Honoré, is thanking his former manager for answering a cold call two years ago.

“It was an energy broker who said he could get us a good 100% renewable deal. We signed up for five year deal which was 3p per KWh. That has gone up to 5p, but I know we’ve been incredibly lucky,” says Neil.

Coupled with his switch earlier this year to induction, and Neil knows that he picked a great time to make these two business decisions that have proved good for the business and the planet.

For organisations with fixed contracts, BEIS has confirmed that the discount will “reflect the difference between the government supported price and the relevant wholesale price for the day the contract was agreed”. For other variable contracts, the discount will reflect “the difference between the government supported price and relevant wholesale price”.

As with the domestic energy relief package announced earlier this month, the scheme will be automatically applied to eligible organisations.

The Government will also publish a review of the scheme in three months’ time, which will inform any potential extensions beyond the current end date of March 2023.

Could the Government have done more in terms of using this as an opportunity to address energy policy through the prism of climate change? Without question they could.

Earlier this week saw more than 100 businesses and financial institutions urge new Prime Minister Liz Truss to couple plans for dealing with the cost-of-living crisis with plans for climate action.

And, Jess Ralston, Senior Analyst at the Energy and Climate Intelligence Unit, said: “With taxpayer support only set to last for six months under the current plan, the question is what happens after that?

“Experts have said time and time again that the government’s approach to the gas crisis is missing a key component – conserving energy. While billions will be spent on bailing out bills, much less is targeted at the root of the problem, that we waste huge amounts of our energy.”

For more detail on the Energy Bill Relief Scheme click here. And for energy saving advice and support check out this from Energy Saving Trust.

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