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Business & Politics

Energy discounts to continue for further year for ‘energy intensive’ businesses including food processing

Chloe RyanBy Chloe RyanJanuary 16, 20232 Mins Read
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The government has committed to continuing to offer discounted energy rates for businesses classes as ‘energy intensive industries’ until March 2024.

The announcement this week of the new Energy Bills Discount Scheme for businesses was welcomed by organisations including the British Meat Processors Association (BMPA) because food processing and manufacturing are included on the list of energy intensive industries that warrant a higher level of support.

The Government said the new scheme would help businesses locked into contracts signed before recent substantial falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again.

The government provided an unprecedented package of support for non-domestic users through this winter, worth £18 billion per the figures certified by the OBR at the Autumn Statement. This is equivalent to the cost of an increase of around three pence on people’s income tax.

The government has been clear that such levels of this support, unprecedented in its nature and huge scale, were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.

The Government said the new scheme therefore strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion.

From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.

A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. A long standing category associated with higher energy usage; these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.

 

 

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Chloe Ryan

Editor of Poultry Business, Chloe has spent the past decade writing about the food industry from farming, through manufacturing, retail and foodservice. When not working, dog walking and reading biographies are her favourite hobbies.

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