Scottish businesses are feeling the squeeze from rising energy costs – and the majority would support a shift to zonal pricing, according to new research commissioned by Octopus Energy Group.
Nearly nine in 10 businesses (88%) said the rising costs had impacted them, and 62% reported a “significant” impact.
The research was conducted by Diffley Partnership and Stratcom UK on behalf of Octopus Energy Group.
The report claimed there was “overwhelming support” for a shift to zonal pricing – a system where energy costs reflect the amount of energy produced in a region.
Two-thirds of respondents (64%) supported energy pricing reform, with just over 14% in opposition, the report said.
The highest levels of support for zonal pricing came from manufacturing and IT sectors.
Higher energy prices are affecting jobs, investment and customer prices, with 66% of businesses saying it has influenced hiring decisions and 77% saying it has contributed to price hikes for customers.
If energy prices were to drop significantly, businesses report they would increase staffing levels (64%), invest more in their business (74%) and even bring benefits outside of industry by lowering prices for customers (70%).
The research comes off the back of a report by FTI Consulting commissioned by Octopus Energy, which claimed that introducing zonal pricing across the UK could save households and businesses £55bn on energy bills over the coming decades.
Octopus Energy Group founder Greg Jackson (pictured) said: “Under our current system, hard-up Scottish households and businesses are exposed to some of the highest energy prices in Europe, while wind farm owners are paid nearly £2bn annually to turn off cheap green energy in Scotland that could be helping out local consumers.
“This research shows the status quo is indefensible given its impact on jobs and investment. It’s hurting households and businesses and has got to change if we want to grow.
“Under zonal pricing, the whole country would save £55bn on bills, prices in Scotland would be amongst the cheapest in Europe and Scottish businesses would thrive.”
A total of 234 Scottish businesses across all sectors took part in the survey.
Last month, however, trade bodies including Scottish Renewables urged the government to rule out zonal pricing, claiming it would increase the cost of investing in renewable energy projects and have a negative long-term impact on electricity bills.