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Changing energy policy: what you need to know

The Government plans to change renewable subsidies, boost the power of the Ombudsman and review energy taxes

A new energy bill making its way through Parliament will have a significant effect on energy suppliers and consumers – particularly businesses who are large users of gas and electricity.

Preparing for new rules and regulations can help keep your company stay ahead of the game, so here's everything you need to know about what's likely to change.

Making waves in the renewables sector

The biggest changes will affect the renewable energy sector. A year earlier than expected, the Government is removing on-shore wind projects from the Renewables Obligation, which requires energy suppliers to source an increasing proportion of the energy they supply from renewable options. The result will be an end to public subsidies for wind farms built on land. Offshore wind farms, as well as solar and tidal sources, will still be subsidised under the Renewables Obligation.

More power for the Ombudsman

Last month, the Energy and Climate Change secretary Amber Rudd said the Government would work with the energy regulator Ofgem and Citizens Advice to give the energy Ombudsman "real teeth". Small businesses in particular may benefit from measures that Rudd said would allow the Ombudsman to address industry-wide problems that result in some customers being poorly served by their energy supplier.

Energy taxes

The Government has also launched a new consultation on energy taxation for businesses, which is likely to have significant implications for larger energy users. It intends to abolish the Carbon Reduction Commitment  – a measure designed to improve energy efficiency in large companies – and replace it with a single energy consumption tax based on the Climate Change Levy. The consultation, run jointly by the Treasury and the Department for Energy and Climate Change, will also examine broader changes to the business energy-efficiency tax landscape.

ESOS extensions

Large businesses covered by the Energy Savings Opportunity Scheme have been granted an extension to comply with the new rules. Companies that have clearly demonstrated a desire to comply will now have until 29 January 2016 to become fully compliant. Under the scheme, all businesses with more than 250 employees and a turnover of more than £40m (or balance sheet of £34m) will have to conduct energy efficiency audits every four years, or face fines of up to £50,000.

More from Energy Matters: what your company needs to know about ESOS

Round-up: the energy outlook
  • Project Nexus, a series of changes to the way gas metering and consumer levels are monitored, has been delayed by a year and will now come into effect from the end of October 2016.
  • The National Grid's latest winter outlook report continues to predict that electricity margins will be tight but manageable over the coming months, but suggests that business owners should prepare for possible price increases.
  • A report into Ofgem price controls by the Competition and Markets Authority has not found cause for any major changes in the way charges are levied for the distribution of energy.

Since energy legislation can have real consequences for your business – bringing both costs and opportunities – it's important to understand the changes that the Government and regulators  intend to introduce. In order to help business owners manage that planning process, E.ON provides its customers with a range of news feeds, newsletters and soon webinars to explain new rules – and how companies might best respond to them.

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