Open Letter to the Department for Energy Security and Net Zero and the Department for Business and Trade

For the attention of the Secretary of State,
Department for Energy Security and Net Zero and Department for Business and Trade
With reference to the Department for Environment, Food & Rural Affairs

The UK business environment is entering a period of renewed fragility, where cyclical pressures are now being compounded by structural exposure to external energy markets. The King’s Speech reinforced that energy independence, infrastructure, economic security and living standards are now deeply connected national priorities. For many organisations, energy is no longer a manageable overhead. It is a primary driver of cost volatility, directly impacting margins, investment decisions and long-term competitiveness. Moreover, this is not a short-term energy crisis, instead serving as a structural exposure that requires critical attention.

Small and medium sized enterprises are already contending with tightening margins, constrained access to capital and sustained input cost inflation. Recent geopolitical developments have intensified these pressures further. The recognition that the nation’s energy and economic security will be tested reflects the real-world conditions now facing UK businesses. Analysis from the Organisation for Economic Co-operation and Development indicates that the UK is among the most exposed major economies to energy-driven inflationary pressures arising from global instability. As a net importer of energy, the UK remains particularly sensitive to this dynamic, with oil and gas price movements acting as a direct transmission mechanism from global events into domestic business costs.

At SaveMoneyCutCarbon, we work with more than 1,000 organisations across commercial, industrial and public sector estates, supporting the reduction of energy use, water consumption and carbon emissions through an integrated model spanning audit, engineering, financing, installation and verified performance. Through delivery across more than 2,500 projects nationwide, we have real-time visibility into how energy exposure is shaping decision-making across UK businesses. Energy is now a defining factor in capital allocation, operational resilience and long-term planning.

What this environment has exposed is not simply sensitivity to external shocks, but a deeper structural issue. A significant proportion of Business Britain operates within cost bases fundamentally determined by external energy markets. This extends well beyond direct energy procurement into transport, logistics, manufacturing inputs, construction and agricultural. Energy volatility is no longer a discrete cost pressure. It is a systemic multiplier that reduces the ability of businesses to plan, invest and compete.

International comparisons underline the UK’s position. Economies that have prioritised domestic energy resilience and system stability have been better able to absorb recent shocks without the same transmission into business costs. France and Norway have maintained greater insulation from global gas price volatility, enabling more stable cost environments for domestic industry. By contrast, the UK’s continued linkage to international gas markets leaves businesses exposed to fluctuations they are unable to influence or control.

Within the UK, this structural exposure is most visible in areas where infrastructure limits access to alternative energy systems, including rural and off-grid regions where reliance on oil remains prevalent. However, these areas are not outliers. They are leading indicators of a wider national vulnerability. An estimated 4 million properties remain off the gas grid, with approximately 1.5 million homes and a significant number of commercial and public buildings dependent on heating oil. Recent price increases in regions such as the Shetland Islands demonstrate how quickly global energy movements are transmitted into local economies.

For businesses across manufacturing, agriculture, hospitality, retail and logistics, the implications are immediate. Energy underpins production, distribution and service delivery. Volatility feeds directly into margins, pricing and investment decisions. Unlike other cost categories, where efficiencies can be driven internally, energy pricing remains largely outside business control. This creates a structural constraint and a clear competitive disadvantage.

At the same time, the pathway to reducing this exposure remains unclear for many organisations. Policy direction exists, but the infrastructure, financing mechanisms and delivery frameworks required to enable transition at scale remain inconsistent, particularly for SMEs. There is now a clear gap between policy ambition and delivery on the ground.

Through our work across the UK, we consistently encounter the same barriers. Grid capacity constraints limit electrification. Planning and regulatory processes introduce delay. Upfront capital requirements remain prohibitive for many SMEs. Legacy and listed building stock further constrain deployment. These are not theoretical issues. They are preventing viable projects from proceeding today. A recent example from our work with a bank-referred client in the manufacturing sector illustrates the immediacy of this challenge. 

The business, a foundry operating energy-intensive electric furnaces, has seen its standing electricity charges increase from approximately £450 per annum in 2021 to £180,000 last year and £250,000 this year as a result of the Targeted Charging Review framework. These charges are linked to consumption banding rather than efficiency improvements, meaning that despite operating within an electrified system, the business faces escalating cost exposure that is difficult to mitigate in the short term. This illustrates how infrastructure design and regulatory frameworks can actively amplify cost pressures for UK industry.

Additionally, a recent commercial retrofit highlights a structural issue in the UK’s energy transition. Current frameworks implicitly favour capital-intensive system archetypes over outcome-based performance, amplifying cost pressures and slowing adoption. A UK SME constrained to electricity would typically be directed toward a heat pump system, often requiring significant upfront capital with payback periods extending to 10–15 years in commercial settings. In this case, an alternative approach using JustHeat delivered the required thermal performance at materially lower capital cost and with immediate operating savings, avoiding long payback cycles. This demonstrates that lower-cost, faster-payback solutions already exist, but are under-recognised within existing compliance methodologies and funding structures.

The UK does not have an energy transition problem in principle; it has an execution problem in practice. Without targeted intervention, UK businesses will continue to operate within cost structures shaped by external markets rather than domestic resilience. This has direct implications for productivity, investment confidence and long-term competitiveness.

Addressing this requires a shift from strategy to execution.

Infrastructure investment must be accelerated to support electrification across commercial and industrial estates, alongside expansion of grid capacity beyond major urban centres. Planning and regulatory frameworks must be streamlined to enable faster deployment of proven technologies. Financing mechanisms must enable adoption without upfront capital expenditure, aligning cost with realised savings and removing a key barrier for SMEs.

In this context, we would welcome the opportunity to work more closely with government and industry to support delivery at scale. We invite the relevant departments within Whitehall, alongside representatives from UK businesses, to engage directly with organisations operating at the forefront of implementation. This will ensure that policy is informed by delivery, and that infrastructure and transition frameworks reflect real-world commercial conditions.

Energy resilience is now inseparable from economic resilience. Reducing reliance on external energy markets must be treated not only as a decarbonisation objective, but as a core priority for the stability, competitiveness and long-term growth of Business Britain.

We would welcome the opportunity to engage further and contribute practical insight from delivery across the UK.

Yours sincerely,
Simon Turek
Group CEO, Haydale plc 

Mark Sait
CEO, SaveMoneyCutCarbon

Mark Sait — CEO, SaveMoneyCutCarbon
Teresa Rutterford — Partner, Nirvana Energy
Luke Bradford — MD, AM Electrics (Renewables) Ltd
Malcolm Byford — finance officer, George Brooker Care Society Ltd
Laura Dudley — Head of Sustainability, arrangeMY
Phil Hughes — Business Development Manager, Design Innovation
Tim Ward — Mechanical Services Manager, Nottingham City Council
Tony Haworth — BDM Specification, Thomas Dudley Ltd
Lee Davies — Managing Director, Debar Ltd
Jhonatta Guglielmino — Head of Quality & Innovation, Haydale
Dennis Mallett — CEO, Plymouth Marine Limited
charlie farr — retired co founder of savemoneycutcarbon, savemoneycutcarbon
Allan West — Director, Go Monitor
Stuart Turton — Senior Partner, Turton Architectural
Stephen Pickering — General Manager, B METERS UK LTD
Richard Ordidge — Club Chairman, Horsham Rugby Club
Dominic Christian — Global Chairman, Aon Reinsurance Solutions
Alan Penman — Energy Consultancy, GMP Consultancy Ltd
Paul Vine — Director, Barton Knight Energy
Stewart McRae — Group CCO, Quidos
Simon Fielder — Partner, Bird & Bird
Paul Stephen Davies — Projects Manager, Dodd Group
Gareth Stephens — MD, LCS Energy
Lee Webster — Managing Director, B-NRG Limited
Ian Harrison — Director, Kings Chelsea Estate Management Ltd
Brenton Screen — Field Ops Director, Quidos Protect
Lee Jackson — Director, Self Service Technology Ltd
Rechelle Davis — Director, Flutter shutter Ltd
Ian Thomas — Managing Director, Turquoise International Limited
James Halstead — Director, Freetime Care Services Limited
Paul Mattia — Facilitie Manager, TEARFUND
Nadine Griffin — Director, Flutter Shutter Ltd
Scott Bridge — Assistant Director of Asset Management, Havebury Homes
Jonathan Hendry — Finance Director & Company Secretary, Advanced Air (UK) Ltd
Gill Orchard — Finance Manager, Knellwood War Memorial Home
Stewart Double — Managing Director, Double Quick Heating Ltd
Karen Ainley — CEO, Mosaic - The Conscience Marketing Agency
Matt Johnson — Client Services Director, Fellowship
Paul Nisbett — CFO, Valor hospitality
Tom Sprunt — Managing Director, Tom Sprunt