The government has announced the launch of the Energy Bill Relief Scheme for businesses. It will give businesses a discount on energy bills based on a government-supported baseline price.
The scheme will incorporate energy customers such as businesses, charities and public sector organisations – protecting them from rising energy costs.
The government will work with suppliers to reduce wholesale energy costs – and the significant rises in bills that businesses have seen. The government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas. The discount is calculated based on wholesale costs of energy expected this winter versus a government-backed price. The aim of the scheme is to help support growth, prevent unnecessary insolvencies and protect jobs.
This scheme is in addition to the Energy Price Guarantee for households, designed to support families across the United Kingdom.
Who will benefit from the scheme?
The government will provide a discount on wholesale gas and electricity prices for business customers whose current gas and electricity prices have been significantly inflated in light of global energy prices.
The scheme will give discounted gas and electricity unit prices for those on non-domestic contracts, including:
voluntary sector organisations like charities
public sector organisations like schools, hospitals, and care homes
The scheme will apply to contracts agreed on or after 1 April 2022.
When will the discounted prices apply?
The scheme will start on 1 October 2022 and end on 31 March 2023.
A review will be published of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable business and non domestic customers, and how the government will continue assisting them with energy costs.
How can my business access the Energy Bill Relief Scheme?
Business customers do not need to take action or apply to the scheme to access support. The discount will automatically be applied to bills. Suppliers will apply the discount on energy bills in pence per kilowatt hour (p/kWh).
Prime Minister Liz Truss said:
“I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.”
“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”
Chancellor Kwasi Kwarteng said:
“We have stepped in to stop businesses collapsing, protect jobs, and limit inflation.”
Business Secretary Jacob Rees-Mogg said:
“We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.”
Kate Nicholls, CEO of UK Hospitality said:
“This intervention is unprecedented, and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter. We particularly welcome its inclusiveness – from the smallest companies to the largest - all of which combine to provide a huge number of jobs, which are now much more secure."
The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government, to ensure that there is no cliff edge when these measures fall away.”