New support for businesses – including care providers – and public sector organisations facing rising energy bills in Great Britain and Northern Ireland has been unveiled by the Government.
The Energy Bill Relief Scheme will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals). This support will be equivalent to the Energy Price Guarantee put in place for households.
Discounts applied automatically to bills
It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6 month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.
You do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.
To help, 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 – which it says is a discounted price per unit of gas and electricity.
The level of price reduction for each business will vary depending on their contract type and circumstances.
Not using gas or electricity?
If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.
Government will publish a review into the operation of the scheme in three months to decide future support after March 2023.
The review will focus in on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.
Are you eligible?
The scheme will be available to everyone on a non-domestic contract including:
Businesses
Voluntary sector organisations, such as charities
Public sector organisations such as schools, hospitals and care homes
who are:
- 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
A comparable rate will be set shortly for Northern Ireland.
For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
- £600 per MWh for electricity
- £180 per MWh for gas
Further support for business/non-domestic customers
There is a range of ongoing schemes in place to support businesses with their energy costs. These include:
- The Industrial Energy Transformation Fund (IETF), which consists of £315 million live grant funding that supports manufacturers with high energy use to cut their energy bills and carbon emissions by investing in energy efficiency and low-carbon technologies
- A number of advice and support schemes that businesses may be eligible for, to help to improve the energy performance of buildings and processes and lower their energy bills. Search for local schemes that provide advice and grants
- The UK Business Climate Hubwhich provides practical steps on cutting emissions and saving money. If businesses are based in England, they may also be able to access support via local Growth Hubs, who they can get in touch with to find out more
- The Government has committed to freezing the business rates multiplier for a further year, which is a tax cut worth £4.6 billion to businesses over the next 5 years
- Guidance: Energy Bill Relief Scheme: help for businesses and other non-domestic customers
