Energy prices

The seriousness of the energy price situation and its impact on food and drink manufacturers continues to be a top focus at the FDF. Many of our companies are facing 400-500% rises in their energy bills, while others report suppliers are demanding huge security deposits or bank guarantees to secure fixed contracts.

While food prices soar across the UK, the energy crisis is having a dramatic impact on the food and drink industry as we continue to work hard to keep prices down for consumers. 

Many of our businesses have now reached the limit of passing inflationary pressures on, having found energy efficiencies where we can, and cutting other costs, including limiting product ranges, R&D and advertising. However, the acute economic situation is exposing real fragilities in our food and drink supply chain, particularly for SMEs, those sectors who are intensive energy users, and users of CO2.

We welcome the package of support available to UK food and drink businesses through the Government’s Energy Relief Scheme. It addresses the largest and most volatile cost pressure facing our industry right now. Although some aspects of the scheme are still to be clarified, it offers relief to food and drink manufacturers across the country.

Government previously announced measures to increase domestic energy supply, including lifting the moratorium on shale gas production, new licensing for oil and gas exploration, and acceleration of new sources of energy supply to nuclear, wind and solar.  There will also be a review of net zero, to consider whether delivering the target is not placing undue burdens on businesses or consumers, with a report due by the end of the year.

The FDF continues to undertake urgent conversations with the UK Government to understand what support will continue to be available to hard-pressed food and drink manufacturers, not least smaller businesses, given our role in ensuring an uninterrupted supply of high quality and affordable food and drink to everyone across the UK.

FDF Members can sign in to view further support for members on this page including a summary of member concerns, FDF engagement so far, resources and next steps.

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Does your business use electricity at peak times?

If so the Electricity System Operator can pay you for delivering some flexibility in your electricity demand. If you choose to participate, there are no penalties for under or over delivery, and equally, if your ability to reduce electricity use changes throughout the day and you can no longer participate in the event, you simply won't be paid for that day. You will not be penalised for non-participation. Any business can participate but you do need to be half hourly metered for your sites / business. For more information click here!

Government call for evidence on electrifying manufacturing!

In July, DESNZ published their ‘Enabling Industrial Electrification: a call for evidence (CfE) on fuel-switching to electricity’ which is open until 20 October 2023 which you can find here. Given that electrification will be the main fuel switching technology for food and drink, FDF will be preparing a response. This survey is part of our evidence gathering, and is open to members and non-members of all sizes including SMEs. Please respond by Friday 29th September. 

National Grid ESO webinar for FDF members – 11 September at 2pm

National Grid are holding a bespoke session for food and drink manufacturers (of all sizes) on how you can earn additional income during this 2023/2024 winter. If your business uses electricity at peak times and want to find out more – register here!  The webinar will cover how you can participate in the Demand Flexibility Service.

Food and Drink CCAs TP6 Target Setting: 2nd August 10 am

This meeting is to provide an update to participants in the Food and Drink CCA managed by the Food and Drink Federation and administered by SLR Consulting. It will cover target setting for TP6, effectively the current two-year extension to the scheme covering 2023 and 2024. The meeting will also outline what will be needed if we are to submit a counterproposal to Government for a lower target. If you would like to register for this meeting, please click here.

Consultation launch on Phase 3 of Industrial Energy Transformation fund

To watch the webinar on Governments consultation launch (5th July) on a third phase of the IETF – please view here. The slides can also be accessed here. The webinar and slides cover the proposed scope, eligibility rules and application process for sites in England, Wales and Northern Ireland to cut their energy bills and carbon emissions through increased energy efficiency and decarbonisation. The scheme will be open for new applications in early 2024. FDF will be preparing a response to the consultation.