Government releases details around Energy Bill Relief Scheme

Today, BEIS have released some more information about the support available for businesses to assist with energy costs over the upcoming winter. 

The new Energy Bill Relief Scheme will provide energy bill relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023. A similar scheme will be established in Northern Ireland, providing a comparable level of support. 

The discount is automatic, so if you get a message asking for your details to sign up or for your bank details, it could be a scam. 

Eligibility

The scheme will be available to everyone on a non-domestic contract including:

* businesses

* voluntary sector organisations, such as charities

* public sector organisations such as schools, hospitals and care homes 

who are:

* on existing fixed price contracts that were agreed on or after 1 April 2022

* signing new fixed price contracts

* on deemed / out of contract or variable tariffs

* on flexible purchase or similar contracts 

The government will provide a discount on your gas and electricity unit prices. To calculate your discount, the estimated wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter. 

For all non-domestic energy users in England, Scotland and Wales the Government supported price has been set at:

£211 per megawatt hour (MWh) for electricity

£75 per MWh for gas

For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:

£600 per MWh for electricity

£180 per MWh for gas 

A Government Supported Commodity Price (cap) will be introduced to limit the amount that the suppliers can invoice at a pence per kilowatt hour level. This cap effects the Commodity Price only. The cap will apply to all consumption between 1st October 2022 – 31st March 2023 (inclusive). 

This Government Supported Commodity Price, which is to be confirmed, is expected to be £211/MWh (21.1 p/kWh) for Electricity and £75/MWh (7.5p/kWh) for Gas. This cap is to apply to any fixed price contract agreed on or after 1st April. The wording of the release suggests that this would also apply to other common supply agreement methodologies (flexible, variable, deemed) entered into at any time. 

The precise level of support will vary based on the specific commodity rate achieved per the contract itself, and although unclear in the current release, could be subject to a maximum discount. 

The Maximum Discount is not confirmed at this stage and is described as a methodology only of “the difference between the Commodity Price Cap and the average expected wholesale price over the period of the Scheme”. This is anticipated to be in the region of £405/MWh (40.5p/kWh) for Electricity and £115/MWh (11.5p/kWh) for Gas. The Maximum Discount will be determined at “the start of the scheme”. 

Fixed Price Agreements

There is no change, your contract takes precedence, and you will not be eligible for the scheme if your fixed tariff is based on wholesale prices below the government supported price. 

Fixed Price Agreements (Signed 01/04/22 onwards)

If you signed your fixed rate contract before 1 April 2022, you will not have been exposed to the recent rises in wholesale prices, so you will not be eligible for support under the scheme. 

Additional support for businesses

There is a range of ongoing schemes in place to support businesses with energy costs, including: 

The Industrial Energy Transformation Fund (IETF), which consists of £315 million live grant funding that supports manufacturers with high energy use to cut their energy bills and carbon emissions by investing in energy efficiency and low-carbon technologies. 

More details are available on the Government website. 

If you have any questions or would like to discuss making your building more energy efficient, please contact your dedicated Evotech Contract Manager or our building performance team on 0333 207 4245.