The Climate Change Levy (CCL) -- a tax on business energy use to encourage environmental responsibility -- is seeing an increase in rates for gas and solid fuels starting April 1, 2024. This is designed to help with the government's goal of achieving net zero emissions by 2050. What is the CCL? The CCL is an environmental tax added to the electricity and gas bills of businesses and public sector organizations. It incentivises reduced greenhouse gas emissions and improved energy efficiency. There are two main CCL rates: Main Rate: Applies to all businesses in relevant sectors and varies depending on energy usage. Carbon Price Support Rate: Applies to electricity generators and combined heat and power station operators (not changing in 2024). What's Changing? Main Rate Increase: The CCL rate for gas is rising from 0.672 pence per kilowatt-hour (p/kWh) to 0.775 p/kWh, matching the existing rate for electricity. This increase aims to create a level playing field between these energy sources and encourage businesses to be more efficient with both. Solid Fuel Rate Increase: The rate for other solid fuels is also rising proportionally to gas. Discount Rate Adjustments: Businesses participating in Climate Change Agreements (CCAs) receive discounts on the CCL in exchange for meeting energy efficiency targets. These discounts are being adjusted to reflect the main rate increase, ensuring CCA participants don't pay more tax. LPG Rate Frozen: The CCL rate for Liquefied Petroleum Gas (LPG) remains unchanged. Impact on Businesses This CCL change will lead to higher energy bills for businesses that rely on gas and solid fuels. To mitigate the financial impact, businesses can explore options such as: Energy Efficiency Audits: Identify areas of energy overuse and implement efficiency measures like LED lighting or improved insulation. Renewable Energy Solutions: Consider switching to renewable energy sources like solar panels to reduce reliance on taxed fuels. Ensuring they have the most competitive rates: By comparing all rates available or using a broker to negotiate on their behalf, businesses can make sure they are not over-paying on their unit rates. The CCL is intended to be a nudge towards environmental responsibility, encouraging businesses to adopt cleaner energy practices. By taking steps to improve energy efficiency, businesses can not only reduce their environmental footprint but also potentially offset the financial impact of the CCL increase. If your business requires advice on how to lower energy bills or create a reduction in carbon emissions, contact us today to see how SeeMore Energy can help you.

March Review By Adam Novakovic, Energy Markets Consultant After 4 months of falling energy prices, March broke the downtrend and saw a bounce in the wholesale and seasonal markets. Electricity prices for the Winter of 2024 rose by approximately 7%, as 2025 seasons increased by over 10%. So, what caused these rises? After a milder than anticipated February, temperatures were below expectation at the beginning of March leading to increased consumption. Around this time LNG imports from the Middle East were being disrupted by on-going conflicts, and the Freeport LNG facility in the US remained offline, reducing the potential for further imports crossing the Atlantic. Closer to home, MPs were announcing plans to reform the electricity market with an emphasis being put on locational pricing. These changes – which are part of the Review of Electricity Market Arrangements – could potentially lead to £35 billion in savings over the next 20 years, although the plans are still in their early stages. A more advanced project that was launched in March, and could potentially lower energy costs, was the new balancing reserve service. In recent years, Use of System charges have been increasing and this measure is seen as a key step in countering these rising costs. The new system will work by procuring reserve energy in advance instead of using on-the-day methods. This is anticipated to lead to over £600 million in savings over the coming years. One of the main disappointments from March’s budget announcements was the lack of a replacement for the Energy Bills Discount Scheme (EBDS). The EBDS had offered vital support to many businesses in the UK throughout the recent period of volatile energy prices. However, the scheme concluded at the end of March, with no replacement scheme being offered. Coinciding with the end of the scheme, OFGEM published a survey revealing that almost 60% of UK businesses are concerned about the impact of energy prices. While IPSOS revealed almost 2/3 rds of businesses are unaware of existing government schemes that could benefit them. If your business is currently looking for a way to reduce energy costs, then contact us to see how we can help reduce your energy spend. And if you would like to read more about government schemes that could help your business, check out the SeeMore energy website where we have a section dedicated to explaining various energy schemes . Outlook Despite the rising prices seen over the past month, fundamentally there are a lot of positives for the future of gas and electricity prices. UK storage facilities remain around 60% full, approximately 20% higher than levels seen for the majority of the last decade. Renewable production is at an all-time high, and there is a steady flow of LNG shipments arriving -- in addition to the supply received from Norwegian pipelines. In spite of this, some fears remain and there are potential negative catalysts that could lead to prices rising further, with the main factors to watch out for being based on geopolitical unrest. Throughout March we saw an increase in the targeting of infrastructure in the conflict between Russia and Ukraine. And, despite an increased US military presence, attacks on cargo ships are still occurring in the Middle East which could have a direct impact on LNG imports from Qatar. Without any further negative catalysts or disruptions to supply, it seems most likely prices will steadily start to fall again over the coming quarter, but it will be prudent to keep monitoring developments in the on-going conflicts. If your business requires advice with its energy procurement, management, or planning, then don’t hesitate to contact Seemore Energy to speak to experienced advisors who can help you with bespoke strategies and advice that is tailored to your needs.