Businesses across the country are heading into annual negotiations with their power suppliers, facing the prospect of a 100% rise in their annual bills. About half of UK small and mid-sized firms strike annual energy contracts that expire in October, and are beginning to enter talks about new deals. Wholesale electricity prices for this winter have jumped to more than £90 per megawatt hour, according to figures – an increase of 110% on last winter. Gas prices have jumped 130% over the same period. The soaring costs, which are hammering company finances across the length and breadth of the country, provide further evidence of the inflationary pressures on the economy. Even some household names are complaining about soaring power bills, behind closed doors. Tesco has seen all the financial advantages of an eight-year programme to halve its power consumption through green initiatives wiped out by soaring prices. James Griffin, a director of Star, an internet services company that employs 250 people in Gloucester, London and Manchester, said energy costs made up 30% of his total overheads. His energy bills had jumped 70% in the past 18 months, with his three data centres alone now consuming £1.5m worth of electricity a year. “I used to worry about how much revenue I could generate from each of my servers,” said Griffin. “Now I worry about how much I can squeeze out of each unit of power.” Griffin’s fears reflect the experience of firms across the UK. One chain of six small car dealerships in South Yorkshire has seen its electricity bill jump to £60,000 a year, from £30,000 a year ago. A specialist baker in Surrey, producing muffins and cakes, has seen its bill jump from £250,000 to £500,000 – the firm has already been hit by soaring wheat costs. A car-parts manufacturer in Manchester, meanwhile, has seen its power bill climb from £70,000 to £160,000.

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