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Market Intelligence

Energy costs support reduced but help continues for another year
, By Eric Bignell
Jeremy Hunt
Source
https://www.gov.uk/government/people/jeremy-hunt

Chancellor Jeremy Hunt: "My top priority is tackling the rising cost of living – something that both families and businesses are struggling with."

The government has announced how it will continue to help businesses when the current relief for energy bills comes to an end on 31 March. The new scheme gives eligible UK businesses a discount on high energy bills until 31 March 2024.

The new Energy Bills Discount Scheme is less generous than the current winter scheme and commits the government to spending less on the support it provides while still offering businesses some security.

For eligible non-domestic customers who have a contract with a licensed energy supplier, the government is announcing the following support:

  • From 1 April, all eligible non-domestic customers will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
  • This will be subject to a wholesale price threshold of £107/MWh for gas and £302/MWh for electricity. This means that businesses with energy costs below this level will not receive support.
  • You do not need to apply for a discount, it will, as with the current scheme, automatically be applied to bills.

Announcing the scheme today (9 January), Chancellor Jeremy Hunt said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.

“Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.

“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is needed to make sure the market is working for businesses.”

You can read more from the government about the scheme here.

Some quarries and major construction companies might qualify for the intensive industries scheme, which is different from that mentioned above and has to be applied for. You can find out more about that here.

The maximum discounts and price thresholds for these larger users are:

  • electricity – £89/MWh with a price threshold of £185/MWh
  • gas – £40/MWh with a price threshold of £99/MWh
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