Charities could be facing additional costs of more than £2,500 to their annual fuel bill due to a levy being introduced from next month to meet costs of constructing new nuclear power station Sizewell C.

The Nuclear Regulated Asset Base Levy will be used to start providing a return to investors in the nuclear power station.

But while the government has agreed that industries using the most electricity will be exempt from new charges, energy regulator Ofgem has confirmed this exemption will not apply to charities.

Social Investment Business (SiB), which provides funding to charities for costs including energy saving measures, estimates the average charity will face additional costs of between £100 and £240 a year.

Some are set to face more than £2,5000 a year increase as a result of this levy, estimates SiB, which is also concerned about the harm the levy will do to charities net zero ambitions.

Nick Temple, SiB chief executive is calling on the government to “urgently provide an exemption to this new levy for charities, who are particularly vulnerable to rising costs”.

SiB suggests the government should instead consider placing the levy on gas bills or in general taxation, as is being called for by green campaigners as a way of switching to more sustainable heating options such as heat pumps.

“Adding yet more charges on top of charity electricity bills penalises our most vital community spaces at a time when they are already struggling.

“It is also in opposition to the government's mission to achieve net zero by making electricity more expensive for consumers just at the time we’re being urged to switch to electric heat pumps to reduce emissions.”

Among charities who face an annual energy cost hike in excess of £1,000 is Bristol art charity Spike Island, which is looking to decarbonise its 80,000 sq ft former tea packing factory gallery space.

“As an active member of the Gallery Climate Coalition, we are committed to environmentally aware practices and have a plan to reduce our carbon footprint by 50% by 2036 and achieve Net Zero in the 2040s,” said its deputy director Kate Ward.

“Rising electricity costs will prevent us from switching to low-carbon heating like heat pumps, increase our running costs and put our work with artists at risk.

“The government needs to rethink how they approach electricity bills to make it viable for more charities and small businesses to make the right decisions for the planet.”

SiB is urging charities to contact their energy providers if they are on fixed tariff. If they are on a variable tariff the charges will be introduced from 1 November, advises SiB

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