Government launched the Energy Bills Relief scheme on the 1st of October. Read on to learn more about this energy support package for businesses and organisations.

Do you need to apply to access the support?

Businesses do not need to take action or apply to the scheme to access this support. Support (in the form of a p/kWh discount) will automatically be applied to bills.

UKFT has been raising the critical impact of energy costs on the sector to government for many weeks and the newly announce Energy Bill Relief Scheme will see a significant cut in energy bills for businesses.

It will apply to both fixed contracts agreed on or after 1 April 2022, as well as to variable and flexible tariffs and contracts.
It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users.
The savings will be first seen in October bills

How will support be administered?

To administer support, the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The level of price reduction for each business will vary depending on their contract type and circumstances:

• Businesses on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis.
• Those on default or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme. The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Businesses on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases.

The Government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the Government’s Energy Bill Relief Scheme support.

For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount.

A 3-month review of the scheme

The Government has launched a 3-month review of the Energy Bills Relief Scheme that includes the below survey. This will help the Government better understand the energy needs of businesses, organisations and trade associations across the UK. The aim of this questionnaire is to identify the organisations that are the most likely to face higher energy costs and that will require support past the 31st of March 2023, as well as how to appropriately support them.
You have until Monday the 24th of October to take the survey and help refine the Energy Bills Relief Scheme.

Take the survey

Note:

– A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.

– If you are not connected to either the gas or electricity grid, equivalent support will also be provided for businesses who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.

– The scheme will be reviewed in 3 months time and UKFT will be working with BEIS during this time to ensure that it continues to provide the vital help the industry needs at this challenging time.

Learn more about the scheme