The government has unveiled its Energy Bill Relief Scheme, designed to support businesses and other non-domestic energy customers with soaring energy costs. The scheme covers Great Britain and Northern Ireland.
Please see here for government guidance on the scheme.
How will it work?
Through the scheme, the government will provide a p/kWh discount on wholesale gas and electricity prices for all non-domestic customers, with the support equivalent to the Energy Price Guarantee for households. The government has set a Supported Wholesale Price, which is expected to be £211 per MWh for electricity and £75 per MWh for gas. This represents less than half of the wholesale prices anticipated for the coming winter. Green levies paid by non-domestic customers have also been removed.
The discount will apply to fixed contracts signed 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 21 March 2023 – running for an initial six-month period. The savings will first be seen in October bills, which are usually received in November.
Businesses do not need to apply to take any other action to access the Energy Bill Relief Scheme, with the discount automatically applied to bills.
How much will my bill reduce by?
The level of price reduction for each business will vary depending on their contract type and circumstances:
Non-domestic customers on existing fixed price contracts
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These customers will be eligible for support so long as the contract was agreed on or after 1 April 2022
Provided that the wholesale element of the price the customer is above the Government Supported Price (£211 per MWh for electricity and £75 per MWh for gas)
Customers entering new fixed price contracts after 1 October will receive support on the same basis
Non-domestic customers on default, deemed or variable tariffs
These customers 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 if likely to be around £405/MWh for electricity and £115/MWh
Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will change over time and may still be subject to price increases - this is why 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 Energy Bill Relief Support Scheme
Non-domestic customers on flexible purchase costs
The level of reduction offered will be calculated by suppliers according to the specifics of your company’s contract and will also be subjected to the Maximum discount
If you are in Northern Ireland
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A parallel scheme based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be stablished in NI
What if I’m not connected to the grid?
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Equivalent support will be provided for non-domestic consumers using heating oil or alternative fuels other than gas
Further information will be announced shortly
Next steps
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Government will publish a review into the operation of the scheme in three months (expected date: 21 November) to inform decisions beyond March 2023
This will focus in particular on identifying the most vulnerable non-domestic customers, and how government will continue to support them
