Businesses can breathe a small sigh of relief as the UK government announces a support package to tackle energy bills for firms over the next 6 months. Firms were looking at crippling energy costs over the coming months as the cost of gas and electricity soars – but the current plan to help firms will see these costs cut by almost half. Whilst there is natural concern over what happens once this 6-month period is up, the Government is going to review the plan in 3 months’ time and look to support the ‘most vulnerable’ sectors after the Spring. Whilst these further details are yet to be revealed, it means businesses can look to the winter months with more optimism than they have done in recent weeks.
The scheme will be available to everyone on a non-domestic contract including:
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals and care homes
- on existing fixed price contracts that were agreed on or after 1 April 2022
- signing new fixed price contracts
- on deemed / out of contract or variable tariffs
- on flexible purchase or similar contracts
The amount your bills will be reduced
The government will provide a discount on your gas and electricity unit prices. To calculate your discount, the estimated wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter.
For all non-domestic energy users in Great Britain this government supported price has been set at:
- £211 per megawatt hour (MWh) for electricity
- £75 per MWh for gas
How you will get the reduction
The support will be automatically applied to all eligible bills. You do not need to take action or apply to the scheme.
The savings for energy used in October will be seen in your October bills, which would usually be received in November.
Reviewing the scheme
The Government have stated that they will review the scheme in 3 months time (December 2022) to make an informed decision on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.
The review will consider:
- how effective the scheme has been in giving support to vulnerable non-domestic customers
- which groups of non-domestic customers (by sector, size or geography) remain particularly vulnerable to energy price rises, taking into account the latest price position and forward curves, alongside other cost pressures
- how to continue supporting these customers – either by extending the existing scheme for some users, or replacing with a different scheme
Continuing support to those deemed eligible would begin at the end of the initial 6-month support scheme, without a gap.
For further information about the EBRS please visit here