What happened
The Energy Security and Net Zero Committee, the cross-party group of MPs that scrutinises the Department for Energy Security and Net Zero, published its report "The cost of energy" (HC 416) on 21 October 2026. edie covered it the same day; we checked everything below against the report itself.
The recommendations most relevant to a business energy bill are:
- Move remaining policy costs from electricity to gas. The report notes evidence from NESTA that, on 2024 figures, over 80% of policy costs were added to electricity bills. It also asks the Government to publish an assessment of whether gas users least able to bear the extra cost could be supported separately through general taxation.
- Keep future policy costs off bills. The committee says future policy costs "must not be placed on billpayers".
- Speed up work on gas setting the electricity price. The report says gas sets the wholesale electricity price most of the time and that the Government expects it still to do so half the time in 2030. It wants the outcome of the Government's review of options published before the end of 2026.
- Better access to power purchase agreements for business users, including government underwriting, and a policy statement by the end of 2026 on how data centres' demand will be met.
The report does not settle the debate. It records warnings from energy supplier witnesses that moving costs onto gas could fall hardest on people who cannot leave gas quickly, and the minister's view that rebalancing is a trade-off the Government keeps under review. Parliament's record for the report lists a government response deadline of 21 December 2026. Until then, nothing on your bill changes because of this report.
What it means for a small business
Levies change what you pay, not what you emit. Your carbon report is still kWh times the government conversion factor. What levies do change is the running-cost comparison you make before electrifying heat or vehicles, and that is the gap the committee's recommendation would narrow. If policy costs moved onto gas, heat pumps, electric vans and electric kitchen or process equipment would look better against gas when you compare running costs. We are not predicting prices: the point is that the carbon case is already there, and this would add to the financial one.
It also matters for which scope your emissions sit in. Gas burned on site is Scope 1, and so is fuel in vehicles you own. Electricity is Scope 2. Electrifying heat and fleet moves emissions out of Scope 1 and shrinks the total, because the UK grid factor is now well below the carbon cost of heat from gas.
Un exemplu calculat
Take an illustrative business that uses 60,000 kWh of mains gas a year for heating, as shown on its bills. Two assumptions, both just for this example: the boiler is 85% efficient, so the building needs 51,000 kWh of heat; and a heat pump delivers that heat with a seasonal efficiency (SCOP) of 3, meaning 3 kWh of heat for each kWh of electricity. Your installer's design will give the figure for your building.
| Încălzire | Energie consumată | Factor (2026) | kg CO2e |
|---|---|---|---|
| Centrală pe gaz (Scope 1) | 60.000 kWh gaze | 0.18231 kg per kWh | 10,939 |
| Pompă de căldură, SCOP 3 (Scope 2) | 17.000 kWh energie electrică | 0.13096 kg per kWh | 2,226 |
That is a saving of about 8.71 tonnes CO2e a year, roughly 80% of the heating emissions, using the government's 2026 factors. Our post on heat pump savings for an office shows the same sum at different efficiencies and how the answer has changed since 2019.
What to do now
- Get your gas use in kWh. If your bill shows meter readings rather than kWh, our guide to turning a gas meter reading into kWh and CO2e walks through it.
- Compare running costs with your own rates, not averages or headlines: cost of heat from gas is the gas price divided by boiler efficiency; from a heat pump it is the electricity price divided by the SCOP.
- Look at vehicles the same way. See the carbon payback of electric company cars and how to count EV charging.
- Put the switch in your reduction plan as an action with a date, so the saving counts towards a target built on things you control.
Cum vă ajută Carbon Recycling
Carbon Recycling turns your gas and electricity kWh into CO2e with the right year's DESNZ factor and puts gas in Scope 1 and electricity in Scope 2 automatically, so the dashboard's scope split shows the shift when you electrify. Its Carbon Reduction Plan report sets a target from your baseline year and draws the path to it, so a heat pump or EV switch shows up against your plan. To check the sums before you sign up, try the free kWh to CO2e calculator or read our guide to Scope 1, 2 and 3.