Big companies will pay half a million pounds a year for energy until 2026, according to forecasts

Energy bills for large commercial and leisure units will rise to £550,000 a year by 2026, according to new forecasts.

Data from Cornwall Insight reveals that small industrial businesses will pay this huge annual sum for electricity in April 2026, equivalent to £238 per MWh.

The forecast, which aligns with the April-March contract renewal period, reveals that typical industrial energy costs have fallen from highs of almost £1m in 2022/23.

But they remain much higher than the historical average, as the energy crisis and the Russian invasion of Ukraine continue to affect wholesale prices.

It marks a 57 per cent increase on the pre-energy crisis level of around £350,000, or £151 per MWh, and a small increase on current bills which are currently around £540,000 a year.

The exact amount a business will pay depends on its energy supplier and their rate, what part of the country the business operates in, and its overall energy usage.

Cornwall Insight’s forecasts are based on typical annual usage of 2.33 GWh.

The energy consultancy also warned that behind some price increases are an increase in new taxes on carbon emissions, as well as some new cost elements.

The forecast comes after Cornwall Isight said smaller businesses are paying £5,000 more for their annual energy bill than at the start of the energy crisis.

Forecasts show that small businesses’ annual electricity bills will average £13,264 in April 2025; Up 70 per cent on the £7,811 paid in 2020/21.

Unlike household energy bills, businesses do not benefit from a price cap to protect them from rising bills.

It means that businesses, large and small, are more exposed to the full cost of the wholesale market, affecting profitability and causing some to close permanently.

Recent research by accountancy firm Price Bailey showed that one in 10 pubs are at imminent risk of closure and are unlikely to access finance without personal guarantees from directors.

Pubs, in particular, have been hit by higher energy costs, as well as an increase in the price of labor and food and drink.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “Many businesses, especially in retail, are experiencing an increasingly challenging environment, with some struggling to survive month on month.

‘Our forecasts showing energy costs will rise in 2026 only add to the pressures businesses face.

“The impact could be far-reaching, from job losses and disruptions to supply chains to a decline in consumer spending, consequences that could ripple through the entire economy.”

The Government has redoubled its commitment to the generation of renewable energy that should be filtered to reduce bills.

However, investment in new projects is likely to take several years before clients begin to feel the benefits.

Lowrey adds: ‘We hope that the renewed focus on delivering sustainable domestic production can bring some stability to the energy market and reduce bills in the long term.

“However, as we wait for these potential cost reductions, it is essential that policymakers and industry leaders work together to find solutions that can help ease the burden on businesses, many of which cannot afford to wait years to get help.

Has the high energy bill affected your business? Get in touch: editor@thisismoney.co.uk