British businesses will see less government support on energy bills from March, when the existing support scheme will be replaced by a new system.
Around two-thirds of UK manufacturers fear reduced support will lead to blackouts if prices rise, according to trade body Make UK, while many said production and job cuts may be needed.
Feared cuts to public support have left “companies nervously looking over their shoulders,” said Make UK chief executive Stephen Phipson.
Potentially higher costs leaves “the clock ticking for many companies,” he added, with “production planning very difficult” too.
The government’s energy support scheme for businesses is forecast to cost some £18.4bn during its six-month span, with public funding expected to be halved under the new system.
In November, public sector borrowing hit a high of £22bn, far above the £13.9bn seen a year earlier.
Businesses currently see prices capped at £211/MWh for electricity and £75/MWh for gas, but a new system where wholesale prices are discounted will be announced in the House of Commons on Monday.
Prices in excess of £600/MWh for electricity and £180/MWh for gas had been predicted over the winter when the scheme was introduced on 1 October.
Higher energy costs, sparked by the conflict in Ukraine, have left businesses facing higher operating costs, with energy intensive sectors such as manufacturing likely to be hit harder by reduced support.
A treasury source suggested firms with more reliance on energy to operated could gain higher discounts, however, whilst speaking to the BBC.