Government energy support scheme announced for businesses
Business energy consumers will receive financial support from the government, under a new 6 month energy support scheme, in response to the current energy crisis.
Update: The government released an update for the Energy Bill Relief Scheme on the 10th of October.
The following are some of the newly introduced changes that are being made to the scheme:
- The government has expanded the Energy Bill Relief Scheme. Expansion of the scheme means that customers who signed contracts at the end of last year or the first quarter of this year are now covered.
- Relief can be claimed on selected dates where wholesale energy prices were extremely high for fixed contracts signed between December 1st, 2021, and 31st March 2022. Previously, this was only applicable to contracts signed on or after April 1st, 2022.
- There’s a new requirement on suppliers to ensure the price customers pay does not fall below the government-supported price of 21.1p per kWh for electricity and 7.5p per kWh for gas. This means when wholesale costs, network costs, environmental levies, and supplier margins are all factored in, the price customers pay (known as the ‘effective retail unit price’) cannot fall below the government-supported price.
- The Climate Change Levy and VAT can, however, be added on top of these costs.
- For those customers on flexible purchase contracts, the government has confirmed further details will be released shortly.
The original blog post from September 14th can be found below.
The government has said that non-domestic energy users will be offered an equivalent Energy Price Guarantee, as is currently being offered to domestic consumers. This is due to concerns that non-domestic consumers have been overly exposed to rising energy prices, without the benefit of the Ofgem price cap.
The Energy Price Guarantee for domestic consumers is set to replace the current energy price cap, and limits the amount of energy that suppliers will charge. The savings will be based on usage. This should lead to a typical UK household paying on average £2,500 a year on their energy bills for the next two years. The new support scheme for non-domestic consumers should result in similar savings.
The scheme for non-domestic consumers will be reviewed after 3 months to see how it is progressing and to consider where it should be targeted, to ensure those most in need receive support. After the 6 months have passed, only those industries considered to be ‘vulnerable’ will continue to receive support.
More information about the government scheme for businesses can be found here.
More broadly, the government has also set up the Energy Supply Taskforce, which will negotiate with energy suppliers with the aim of lowering wholesale costs. This is the main factor behind the current energy crisis. The Taskforce has already begun negotiations with domestic and international suppliers to agree long-term contracts that reduce energy prices and increase the security of supply.
Where does t-mac come in?
At t-mac, we understand the pressures that businesses are currently facing, as the energy crisis continues to wreak havoc on the economy. Our dedicated metering and monitoring solutions can provide you with vital insights into your costs and energy consumption. With this vital data, you can better understand your energy usage and take steps to increase efficiency and lower usage. In the current economic climate, this information is essential.
Get in touch today to find out how our technology solutions can help you attain peak energy efficiency and, in turn, lower your bills during the energy crisis.