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.
Defra have indicated that they would welcome feedback from the food sector, which will be collated and shared across government. Please send these to charlotte.linacre@defra.gov.uk.
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
- 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
What if I’m not connected to the grid?
- Equivalent support will be provided for non-domestic consumers using heating oil or alternative fuels other than gas
- Further information will be announced shortly
update
Please see an update from the BEIS Energy Bill Relief Scheme team below:
We have amended the date from which fixed contracts are eligible under the scheme, changing the date from 1 April 2022 to 1 December 2021. The decision on expanding the eligibility period was taken to ensure businesses and other non-domestic consumers who have experienced recent energy price increases are supported as they navigate the challenging winter period ahead.
We have also introduced a floor price for the scheme, which will help to ensure a consistent level of support, as well as helping to avoid unintended consequences in some circumstances, such as a customer’s retail unit prices turning negative after a discount is applied.
Read the updated guidance on the EBRS: https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers
Additionally, details for the Northern Ireland part of the scheme have been published. This update provides information on how government will be supporting businesses and other non-domestic energy users with their energy bills, including eligibility criteria, exclusions and maximum discount figures for those non-domestic consumers on deemed or variable contracts. You can read the full EBRS NI scheme details here: https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers-northern-ireland
And finally, the Energy Bill Relief Scheme discount rates for fixed and default/variable contracts have also been published, which you can find here: https://www.gov.uk/government/publications/energy-bill-relief-scheme-discounts-for-fixed-default-and-variable-contracts
Next steps
- 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