The Department for Business, Energy and Industrial Strategy (BEIS), has recently shared information on the energy bills support for businesses, the public sector and households.
Below are the top-line details of the announcement:
Support for non-domestic customers
- A new Government Energy Bill Relief Scheme will provide a discount on the wholesale price of gas and electricity. This support will be equivalent to the Energy Price Guarantee put in place for households.
- This support will be available to all non-domestic customers, including all UK businesses, the voluntary sector, such as charities, and the public sector, such as schools and hospitals.
- 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.
- The scheme 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. Savings will be first seen in October bills, which are typically received in November.
- 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.
- After three months, there will be a review into the operation of the scheme, to inform decisions on further support after March 2023.
The level of price reduction for each business will depend on their contract type and circumstances. For further information, please see the full press notice.
A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.
Equivalent support will also be provided for those not connected to either the gas or electricity grid, who use heating oil or alternative fuels. Further details will be announced shortly.
Support for households in Great Britain and Northern Ireland
- The announcement follows the launch of the Energy Price Guarantee for households in Great Britain. This will ensure that, from 1 October, a typical household will pay on average £2,500 a year on their energy bill for the next two years.
- The guarantee supersedes the existing price cap, limiting the price suppliers can charge customers for units of gas and electricity. It also accounts for the Exchequer temporarily funding environmental and social costs, including green levies, for two years.
- Based on energy prices from October, this will save the average household £1000 per year.
- This support comes in addition to the announced £400 energy bills discount for all households, which, when combined with the Energy Price Guarantee, will bring costs close to where the energy price cap currently stands.
- The Government also announced that the Energy Bills Support Scheme, offering a £400 discount to households, starting from October will be available to the 1% of households who would not otherwise have received this support.
- This includes those such as park home residents and those whose landlords pay for their energy via a commercial contract.
- The Government will also provide an additional payment of £100 to all households across the UK who are not able to receive support for their heating costs through the Energy Price Guarantee. This might be because they live in an area of the UK that is not served by the gas grid and is to compensate for the rising costs of alternative fuels such as heating oil.
Support for Northern Ireland
- The Business Secretary has also confirmed equivalent support for households in Northern Ireland, via the Northern Ireland Energy Price Guarantee.
- Households in NI will also receive a £400 discount on their bills, through the Northern Ireland Energy Support Scheme.