Green subsidies should be removed from industrial energy bills to encourage investment in electrification, the boss of E.On UK has said.
Chris Norbury, chief executive of the UK energy firm, said UK firms were already “concerned” about high energy prices.
Shifting policy costs, such as green levies, into general taxation would lower bills and help companies electrify, he said.
Policy costs on electricity bills include the renewable obligation and feed-in tariff, both of which help pay for clean power generation. But these also drive up the bill total.
The UK has the highest industrial electricity prices in the developed world, which critics say is pushing businesses abroad.
Government relief schemes offered to the most energy-intensive sectors lower bills by exempting firms from green levies.
Mr Norbury said moving these costs into general taxation would boost businesses and help support the transition to renewables.
Research from the company indicated that many UK businesses are keen to invest in low-carbon technology but are put off by the costs involved.
E.On said it believes UK manufacturers could save more than £2billion by 2035 by switching away from gas and scaling up clean energy technology.
Analysis from the group’s ReIndustrial Revolution indicates that UK companies can benefit in the longer-term from green energy investments.
Mr Norbury said that the recent move by Andy Burnham’s Government to remove VAT from consumer electricity bills shows that ministers are “moving in the right direction”.
“We hope it shows there is an overall direction of travel within Government about the positives that electrification can bring,” he said.
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He said he had already spoken to Energy Secretary Miatta Fahnbulleh, highlighting the supplier has a “positive and constructive” relationship with Government.
Nevertheless, Mr Norbury said business customers are keen to see supportive energy policies and a stable backdrop for investment.
He said: “Whether it’s small, medium or big businesses, they are concerned about rising energy costs, some of the rising commodity costs and therefore don’t want to see an impact from higher policy costs.”
E.On has suggested that the Government could seek to shift policy costs into general taxation, or a dedicated energy transition fund to help firms.
E.On has agreed to buy rival Ovo in a deal which would create Britain’s largest supplier.
The deal, which still needs to secure regulatory approval, would create a combined business serving about 9.6 million customers.
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