Due to the current climate, we are all rightfully apprehensive of the energy bills coming our way this winter. This article outlines what support is available from the government to help our businesses make it through the season.
Energy Bill Relief Scheme
This is a scheme that will provide discounts on energy usage for everyone on a non-domestic contract- this includes businesses, charities, schools, hospitals, and care homes- that fulfill one of the following conditions:
- On existing fixed price contracts agreed on or after 01/04/2022
- Signing new fixed price contracts
- On deemed/out of contract/variable tariffs
- On flexible purchase or similar contracts
The discount will be calculated by comparing the wholesale portion of the unit price you would be paying to the baseline 'government supported price', which is lower than the wholesale prices currently expected.
The government supported price is based on the wholesale element of the Energy Price guarantee for domestic customers.
The government supported price is currently:
- £211/MWh for electricity
- £75/MWh for gas
For comparison, wholesale costs are expected to be around:
- £600/MWh for electricity
- £180/MWh for gas
Calculations for fixed contracts
The discount applied to your bills will reflect the difference between the government supported price, and the wholesale price for the day the contract was agreed. The government will publish the wholesale prices used in the calculations for each day from 01/04/2022.
Calculations for variable, deemed, and other contracts
The discount will reflect the difference between the government supported price and the relevant wholesale price, though it will be subject to a 'maximum discount'- this amount has yet to be confirmed but is estimated to be £405MEh for electricity and £115/MWh for gas. Businesses on these contracts will need to decide whether or not to move to a fixed contract- this would suit you if you don't want to be exposed to price variation. You should be contacted by your supplier regarding this.
All discounts will be applied automatically to your energy bills and will be in place from 01/10/2022 to 31/03/2023.
This is currently the only scheme available from the government- we will keep you updated on any changes.
Advice on SME climate hub
The UK business climate hub provides practical steps on cutting emissions and saving money and provides specialist advice for each sector. Some examples are insulation, switching bulbs, and how to efficiently power up and down.