Bakery energy costs update

Seeking and sharing how businesses are faring.

Electricity meter. Credit: Canva

Following the replacement of the Energy Bill Relief Scheme by the Energy Bill Discount Scheme in April 2023, the Campaign would like to hear how Real Bread bakeries are faring.

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Calling SME bakery owners in the UK

What is the current situation for your bakery?

Have you seen your energy prices change and, if so, by how much (year on year or since contract renewal)?
Do you need government support and, if so, of what sort?
If you don’t receive that support, what is the forecast for your business in the next year?
What might the Real Bread Campaign do in support of Real Bread bakeries like yours?

Please send your notes in an email, also saying whether you’re happy to be named if we quote you, or if you’d prefer us to anonymise the comments and figures you send.

We will review the information we receive to gauge the general situation and decide what action we might be able to take or help to co-ordinate.

Help us to help you

Although the Campaign is a charity project, rather than a trade organisation, we’re still fighting YOUR corner!

Despite this, many of the bakery owners who’ve created free lisitings on the Real Bread Map aren’t current supporters of our charity’s work.

Cases

“We had to renegotiate our electricity contract last year and got put onto a rate of 80p a unit, up by four times. My bill quadrupled overnight. Whilst we had government support we could afford our bill. Current electricity prices are around 20p per unit, but I am still being charged 80p per unit. There are many small businesses in the same position as me. Unless my supplier reduces my prices I will have to close my business.” Andy Cole, The Bakery, Felixstowe

"We were running a small but busy and successful business. The never ending increases in ingredients costs, coupled with the government’s decision to remove the electricity subsidy for small businesses, resulted in the business being no longer commercially viable, without us losing the artisan, hand-made approach to our baking, which is our passion and strength. The energy increase in May added £100 per week to our energy bill alone. That, with other increasing costs, meant we decided to close the business at the start of June." Matt Wilding, Winfrith Bakery, Puddletown

The following is taken from a letter sent to Alan Mak MP by a constituent:

“I am writing to you to express my extreme disappointment with the new EBDS scheme for businesses. Actually, I'm livid.

I am shocked to discover that the discount scheme is based on WHOLESALE energy prices; that the government (presumably in consultation with 3rd parties) then sets a forecast threshold for one month to one quarter above which the discounts (EBDS & ETII) kick in.

OK. But..

The current wholesale "threshold" above which the EBDS discount can be applied is 30.2p/kWh.
The current wholesale "threshold" above which the ETII discount can be applied is 18.5p/kWh
The current "wholesale" price is 9.1259p/kWh
My day time rate is 78.459p p/kWh

I don't have a fixed term contract as my initial contract expired March 22, so the current threshold applies on a quarterly basis. It's summer. The wholesale price has dropped. In fact I doubt it will reach the threshold this coming winter, but one must assume that by some peculiar algorithm (published?) the threshold would be raised anyway.

So. My supplier buys its energy from its owner, British Gas and Centrica respectively. Centrica posted £3.2bn profit. British Gas and other suppliers were subsidised by the Government.

Questions:

1. Why did my supplier raise prices (again) in March? (day rate, night rate and standing charge)

2. Why is my supplier charging 860% more than the given wholesale spot rate?

3. I see no possible way that I would EVER be eligible for EBDS or ETII discount

4. Why have my charges only increased, eg.

- 43p Standing Charge - 1 year contract - Jan 22
167.595 Standing Charge - Current
388% increase

- 14p Night Unit Charge - 1 year contract - Jan 22
58.852 Night Unit Charge - Current
414% increase

- 20p Day Unit charge - 1 year contract - Jan 22
78.459 Day Unit Charge - Current
390% increase

To summarise. The discount scheme seems totally pointless. An illusion of a safety net.

How does the Government (anybody) expect me to operate an energy intensive business without passing on price increases and, of course fuelling inflation. £10 pound loaf on Hayling Island anyone? How does the Government expect me to invest in production and people?

I hope the above adequately explains the position. If you require any further information or have any questions please contact me directly.

Meantime, I should like answers to my questions and above all, I should like to know what, if anything, the Government intends to do about this. It is a cruel joke (especially given the conservative party's long and seemingly endless pre-occupation with itself).” John Townshend, LocoLoaf, Hayling Island

Further correspondence between John Townshend and Alan Mak.

Updates

17 July 2023: As we've not received responses from any other bakeries to this, we're focussing on other work. We are happy to consider resuming action on these issues if bakery owners make clear there is need and demand for us to do so.

See also

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Published Tuesday 20 June 2023

Real Bread Campaign: The Real Bread Campaign finds and shares ways to make bread better for us, better for our communities and better for the planet. Whether your interest is local food, community-focussed small enterprises, honest labelling, therapeutic baking, or simply tasty toast, everyone is invited to become a Campaign supporter.

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