“The economy depends on competitive business. Those businesses need to decarbonise cost effectively to remain competitive in the future,” said the ADE’s Tim Rotheray.
The figures have emerged in the wake of fresh concerns over the Hinkley Point C and Moorside new nuclear power plants which threaten to leave a gap in the UK’s energy supplies by the middle of the next decade.
“By installing CHP, thousands of businesses across the UK could help lighten the load of the cost of the energy transition while delivering much needed new capacity, helping to balance the grid and reduce network investment costs,” Mr Rotheray added.
Business energy costs are on the rise, having climbed by almost 120pc since 2004, posing a major threat to UK productivity and the Government’s industrial strategy.
The report argues that the Government should allow CHP to compete in the auction which awards contracts to winning bidders to provide power for the UK in the future. In addition policy makers should dismiss calls to scrap the carbon tax and keep it in place to incentive investment in CHP.
Critics of the UK’s carbon tax, which is higher than in Europe, have warned that UK industry will lose out to European competitors because it adds £36 to the average bill. But the ADE argue that by extending the tax through the 2020s the uptake in CHP will more than offset the higher levy and also help reduce emissions overall.