The government has announced an energy bill support package for businesses. The bill will provide relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023.
Let’s have a further look at the details.
Who is eligible?
The scheme will be available to everyone on a non-domestic contract including:
- voluntary sector organisations
- 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
There are very few exclusions, but might include businesses that generate power to sell back to the grid i.e. power stations.
What’s the reduction amount?
For all non-domestic energy users in Great Britain the government supported price has been set at:
- £211 per megawatt hour (MWh) for electricity (£600 wholesale)
- £75 per MWh for gas (£180 wholesale)
How do you receive it?
Suppliers will automatically apply reductions to the bills of all eligible non-domestic customers. No action or application needed. The savings for energy used in October will be seen in your October bills, which would usually be received in November.
The government will compensate suppliers for the reduction in wholesale gas and electricity unit prices.
Here’s an example of a saving provided by the government:
A pub uses 4 MWh of electricity and 16 MWh of gas a month. They signed a fixed contract in August 2022, giving them a current monthly energy bill of about £7,000. At the time they signed their contract, wholesale prices for the next 6 months were expected to be higher than the government supported price of £211/MWh for electricity, and £75/MWh for gas, meaning they can receive support under this scheme.
The difference between expected wholesale prices when they signed their contract and the government supported price is worth £380/MWh for electricity and £100/MWh for gas, meaning they receive a discount of £3,100 per month, reducing their bill by over 40%.
A review of the scheme will be published in 3 months’ time. This will inform any decision made regarding further support after March 2023.
For further information, you can visit the government website: https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers