New support for businesses facing massive energy bills has been unveiled by the government.
Through a new government Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.
The scheme will cost an estimated £100 billion, and will be paid for by taxpayers over the next decade.
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 six month period
As with the Energy Price Guarantee for households, customers 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 administer support, 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 is a discounted price per unit of gas and electricity. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.
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.
“The help we are already putting in place will save families money off their bills, and the government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.”
The Association of Independent Meat Suppliers (AIMS) welcomed the scheme, but spokesman Tony Goodger said there were still some concerns among the abattoirs his organisation represented. “The support package will help to calm the nerves of some businesses, however, as today’s announcement is for just six months and our members’ businesses as well as the businesses they supply are energy intensive users and it is essential for their business planning that the Government provides further details as to what will happen to energy bills from 1 April 2023 as soon as they are able to.
“The Government is wanting to see the economy grow quickly and our members cannot be left in a position whereby announcements of support are left until the 11th hour if they too are to plan for growth”.