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Government announce updated energy support package for businesses

3 October 2022

Indudstry Update

Energy Bill Relief Scheme

On 1st October the Department for Business, Energy & Industrial Strategy (BEIS) issued an update on the support package under the Energy Bill Relief Scheme for non-domestic energy users that will apply to energy usage for the period from 1st October 2022 to 31st March 2023.

The support, which will apply to all fixed contracts agreed on after 1st April 2022 as well as deemed, variable and flexible tariffs, will be levied against the wholesale energy element of the invoice only, with a floor rate now confirmed by BEIS to be 21.1p/kWh for electricity and 7.5p/kWh for gas. This will not be the final price paid by customers, as other costs such as network charges and operating costs will be charged on top to maintain competition between suppliers.

Although the floor prices outlined in the original guidance have been confirmed, there have been some changes announced to the maximum discounts that will apply.

Customers on a Default / Variable Tariff or Flexible Contract

  • The initial guidance issued by BEIS suggested the maximum discount was “likely to be” around 40.5p/kWh for electricity and 11.5p/kWh for gas. 
  • The updated guidance has confirmed that the discount will be below this at 34.5p/kWh for electricity and 9.1p/kWh for gas.
  • This means that any business that purchased Winter 22 electricity at or above £556/MWh (55.6p/kWh) and £166/MWh (16.6p/kWh or 486p/therm), will only receive the maximum discount against their purchase price and their final price will be higher than the supported price.

Customers on a Fixed Price Contract

  • The maximum discount does not apply to fixed price contracts.
  • For any fixed price contracts signed on or after 1st April 2022 a p/kWh discount will be applied which will reflect the difference between the floor price and the wholesale price for the day the contract was agreed.
  • The discount relevant to each day will be the same for all suppliers.
  • The government are still to publish the wholesale prices that will be used for calculating this for each day from 1 April 2022

Removal of Green Levies

Where these elements of costs are passed through customers will still see green levies being charged on their invoices. The benefit of the removal of these charges is factored into the discount for eligible energy use.

The scheme is for all supplies in England, Scotland and Wales.  A parallel scheme will be established for Northern Ireland.

The new Energy Bill Relief Scheme is currently only for this winter (Oct 22 to Mar 23), however the government will review the support scheme in 3 months to identify the most vulnerable industries who may require continued support.

The full update press release can be found at: https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers

If you want to know how this will impact your business, or need assistance with your current energy strategy, speak to one of our experts today. Contact us on 0345 634 9500 or email info@tridentutilities.co.uk.

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