Why the Government Must Cut Energy Red Tape for Business

Hello, Champions of Net Zero!

The ongoing dialogue surrounding the Labour government’s approach to environmental sustainability and economic growth has sparked considerable interest, particularly in the context of the UK’s ambitious net zero targets. With the Chancellor, Rachel Reeves, recently declaring net zero as the ‘industrial opportunity of the 21st century’, the question arises: can we indeed pursue economic growth without sacrificing our environmental commitments?

Despite this optimistic outlook, concerns loom regarding potential budget cuts to the Department for Energy Security and Net Zero’s flagship initiative, the Great British Energy project. Furthermore, there are ongoing discussions about the feasibility of achieving net zero by 2050—a goal that, while necessary, is increasingly viewed with skepticism in some circles.

At npower Business Solutions, we wholeheartedly support the aspirations laid out in the Clean Power 2030 Action Plan. Transitioning to cleaner energy sources is not just ambitious; it’s essential for our planet’s future. More importantly, the goal of reaching net zero by 2050 is non-negotiable, as businesses that integrate sustainability into their operations stand to gain significant commercial, reputational, and environmental benefits.

Moreover, the recently introduced Planning and Infrastructure Bill aims to streamline the planning process for significant infrastructure projects, including renewable energy initiatives. However, the critical question remains: do these reforms adequately support UK businesses facing immediate challenges?

Addressing Red Tape: A Call to Government

Our recent Business Energy Tracker survey revealed that businesses are keenly aware of the obstacles they face, with reducing planning red tape topping their list of priorities for government support. It is encouraging to see steps being taken in this direction, yet there is still much work to be done.

Businesses have also expressed a strong desire for more grants and tax incentives to facilitate the installation of energy efficiency measures and on-site generation capabilities. They have highlighted the growing burden of non-commodity costs that significantly impact their energy expenditures.

To address these concerns, we initiated our ‘Red Tape Challenge’, inviting businesses to share their insights on the energy and net zero policies and regulations they believe should be revised or eliminated to bolster their sustainability efforts. The response was overwhelming, with over 900 businesses participating in our survey—demonstrating a clear desire for their voices to be heard.

What did our respondents identify as their primary concerns? Once again, planning regulations, non-commodity costs, and grid constraints emerged as critical issues. Additionally, businesses voiced apprehensions regarding the Review of Electricity Market Arrangements (REMA) and raised questions about the efficacy of existing schemes like the Energy Savings Opportunity Scheme (ESOS).

Despite the government’s recent positive actions since the General Election in July—such as lifting the de facto ban on offshore wind, increasing the budget for Contracts for Difference, and unveiling the Clean Power 2030 Action Plan—businesses remain wary. They feel that current energy policies do not provide the necessary assurance for them to invest confidently in renewable energy initiatives.

This apprehension is further compounded by a noticeable shift in sentiment against net zero, with several high-profile companies retracting or entirely abandoning their net zero targets in an effort to mitigate risks amid broader economic pressures.

Engaging with Government: A Necessary Dialogue

To convey these concerns to the government, I took the initiative to write a letter and produce a video addressed to Sarah Jones, Minister of State at both the Department for Energy Security and Net Zero (DESNZ) and the Department for Business and Trade. In these communications, I outlined our research findings and urged her and her colleagues to actively listen to business perspectives. It is imperative that we collaborate with businesses to shape future energy and net zero policy decisions, especially in these pivotal times.

Empowering Businesses for Clean Power

As we look ahead to 2025, it’s clear that significant changes must occur if we are to meet the Clean Power 2030 target and the wider net zero ambition by 2050. The role of businesses in facilitating low-carbon investments will be crucial in this journey.

While the vision of a clean power system and a net zero-driven economy that fosters greater private sector investment is essential for the coming years, businesses urgently require clarity and simplification in policy frameworks in the short term. With several key policies and strategies set to be unveiled this year—including the Industrial Strategy and the Great British Energy Act—we remain committed to collaborating closely with the government to ensure these initiatives effectively support UK businesses.

In the realm of energy and net zero, it is vital that the voice of business is amplified and considered in policy discussions. As we navigate this critical juncture in our pursuit of sustainability, we must work together to foster an environment where economic growth and environmental stewardship can coexist harmoniously.

This article first appeared in the May 2025 issue of Energy Manager magazine. For more insights and updates, consider subscribing today.