Energy

Energy is an increasingly crucial issue for business, particularly in terms of cost and security of supply. Oil and gas prices have been near record levels for some time. Our finite energy resources are rapidly depleting and by 2010 the UK is likely to become a net importer of oil, making us more susceptible to price fluctuations and interruptions to supplies.

Climate change is also a major concern and the UK Government has signed up to the Kyoto Protocol, with targets to reduce greenhouse gas emissions.

In November 2004, the West Midlands Regional Energy Strategy was published, which emphasises the important contribution the region has to make on energy use and generation. The West Midlands has a crucial role to play in the development of alternative fuels and the reduction of carbon emissions due to its strong energy intensive manufacturing base and its land-locked geographical location.

Business Impact
For some energy intensive manufacturers in the region, energy bills now account for between 30 and 40 per cent of their total business spend and many are having to make provisions for rising prices and possible interruptions to supply. The Midlands would be adversely affected by high prices and interruptions to supply due to its manufacturing base and if production was forced to shut down this could also have a detrimental impact on the wider UK economy.

Emissions reduction targets can only be achieved by investment decisions by business, although the public sector and individuals also have an important role to play. Business must be provided with the right incentives to reduce emissions and invest in energy efficient technology. The Climate Change Levy and Emissions Trading Scheme affect businesses, but the success of these on reducing emissions is not yet clear. Many manufacturers have already invested in energy efficiency in terms of machinery and processes, but often come up against regulatory barriers to getting new products on to the market.

Chamber Position
Birmingham Chamber has a well-established Energy Forum, which brings together power suppliers, users and generators, both conventional and alternative to formulate and promote the business view, particularly in relation to the Regional Energy Strategy. The Forum plays a vital role in ensuring that local businesses have a voice in regional and national energy policy.

The Forum welcomes the publication of the Regional Energy Strategy and considers its objectives to be both practical and pertinent, particularly those around reducing carbon dioxide emissions. Business is at the heart of the strategy, in terms of the commercial opportunities it could provide and also the need for research and innovation in to new technologies, to develop a long-term sustainable energy policy for the UK.

Following the government’s announcement of a comprehensive energy review in 2006, the Forum recently met with Energy Minister Malcolm Wicks to discuss a range of energy issues affecting business. The Forum is in favour of a loan system for research into and the development of new technology, as well as greater Government and regulatory support for UK businesses to create a level playing field with the rest of the EU.

Energy is of fundamental importance to nearly all business activity, particularly security of supply and as a matter of urgency the Government must seriously consider a programme of controlled nuclear generation capacity as part of a balanced sustainable energy strategy. With the pressure to tackle climate change and cut our greenhouse gas emissions, many Birmingham Chamber members believe that nuclear power is the most realistic way of providing a long-term supply of energy for the UK.

If you would like to have your say on how energy prices or shortages could affect your business c.ritchie@birminghamchamber.og.uk.

If you would like to be kept up to date or get involved with the Chamber’s lobbying work policyteam@birminghamchamber.org.uk.

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