New analysis urges London businesses to brace for biggest energy cost surge of the decade

Businesses from across Greater London are calling on the UK government to reconsider its Clean Power 2030 target due to concerns about the cost impact of delivering the transition, according to figures from the latest Business Energy Tracker from npower Business Solutions (nBS).

The report - The energy cost crisis: is Clean Power 2030 at breaking point? - revealed that one in 14 are starting to say that the government should push the target back to 2035 as rising non-commodity costs - the network, system and policy costs that are needed to fund the clean energy transition - ramp up over the next few years.

While the majority still back the 2030 target, new analysis from nBS shows that winter 2027/28 is expected to contain the highest peak period for business energy costs between now and 2031, potentially reaching around £523 per megawatt hour (MWh) during the Capacity Market (CM) charging period in January 2028. This means that businesses have just over a year to prepare before this ‘cost peak shock’ arrives.

Figures from the business energy supplier also show that, compared to the EU14 median (the average across 14 European countries including France, Germany, Italy and Spain), UK medium-sized, large and very large businesses are paying 90%, 130% and 110% more respectively for their electricity than their European counterparts.

This is because, since 2021, EU nations have taken steps to suppress policy costs on commercial energy, whereas costs in the UK have increased. 

As a result, for the fifth consecutive year, the Business Energy Tracker shows that energy is the top business risk for London businesses, with nine in 10 (92%) saying they are concerned about the financial impact of clean power, and 75% predicting a rise in energy costs over the next 12 months.

In addition, while 83% now accept that the commercial sector will have to foot some of the bill, over one in five (22%) do not believe the current levels of non-commodity costs are fair.

This means that one of the top asks for Energy Secretary, Miatta Fahnbulleh, and Business Secretary, Jonathan Reynolds, is to introduce a new scheme of direct financial support for businesses that need help with energy costs. 

While initiatives such as the British Industrial Competitiveness Scheme (BICS) have been welcomed, 84% of the businesses in London surveyed also believe a new financial framework should be introduced to support those who fall outside the scope of BICS.

Anthony Ainsworth, Chief Operating Officer at nBS, said:

“Our analysis shows that businesses in London are facing an uphill battle when it comes to electricity costs. While many may have survived the initial energy storm, rising non-commodity charges mean the financial tide is still rising - and our figures show that the true cost peak is still ahead.

“That said, while we are starting to see calls for the clean power target to be delayed, it is important to note that businesses do not want the target to be scrapped. They understand the multiple benefits that a homegrown, renewable system will bring. However, costs that they can’t control are impacting confidence and competitiveness. It’s like trying to pay off a mortgage in five years rather than over 30 years.

“This report shows that new thinking is needed. We are proud that the findings from our previous reports have supported vital policy interventions from DESNZ and BIST, including simplified planning processes for renewables projects, and the introduction of BICS, as well as shaping conversations with Number 10.

“We will continue to bring forward the voice of business with this year’s key ask: the way the UK’s clean power ambitions are funded risks creating a competitiveness crisis unless the costs are spread more fairly and over a longer period. Businesses need to be supported if they are to survive the cost of the transition.”

The Business Energy Tracker 2026 report, The Energy Cost Crisis: Is Clean Power 2030 at Breaking Point?, is now available to download.