Last week, a few days before the latest mini-budget statement, The Department for Business, Energy and Industrial introduced its new support measure for UK businesses, who struggle with the rising costs of energy bills. The Energy Bill Relief Scheme aims to cut wholesale energy prices for non-domestic customers by more than 50%, starting 1st October 2022 until 31st March 2023. The bill covers all private sector businesses, along with charities schools, hospitals and care homes.

In this article, we’ll explain how the Energy Bill Relief Scheme, works.

Further eligibility requirements

• non-domestic customers with existing fixed-rate contracts agreed on or after 1 April 2022. If you signed a fixed tariff contract before 1 April 2022 you will not be eligible for support under the energy relief scheme.
• non-domestic customers with new fixed-rate energy contracts.
• customers without a contract or on variable tariffs.
• businesses on flexible purchase or similar contracts.

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How will the scheme work

The Government will discount non-domestic energy bills by comparing the estimated wholesale portion of the unit price a business would pay; to a baseline supported price, which is lower than the currently expected wholesale rate for this winter.

What is the Government Supported Price?

For Great Britain, it has been set to:
£211 per MWh for electricity
£75 per MWh for gas
A similar rate is expected to be set for Northern Ireland as well.

How will your discount be calculated and applied?

If eligible, the price reduction will be applied automatically by your energy supplier. You do not need to apply for the scheme.

Fixed-priced tariff contracts

Businesses with fixed-priced tariffs agreed on or after 1 April 2022, will get support if the calculated wholesale element of their price is above the government-supported price.

Variable tariff contracts

Similar to fixed-tariff contracts, the reduction will be based on the difference between the government supported-price and the relevant variable rate. However, this will be subjected to a maximum limit of discount.

If you do not have a contract

The Government’s guidance, in this case, would be to go ahead and set up a new contract. Your new supplier will then apply any eligible price reductions automatically, for the duration of the scheme.