The Government has announced the replacement to the current Energy Bill Relief Scheme which is due to start in April.
The new 12 month scheme, the Energy Bill Discount Scheme, announced by Jeremy Hunt will be capped at £5.5bn.
The Energy Bill Relief Scheme (EBRS) will be running until the end of March and will cost £18bn.
The new Energy Bill Discount Scheme:
The Energy Bills Discount Scheme is open to businesses who are:
- On existing fixed price contracts that were agreed on or after December 1, 2021
- Signing new fixed price contracts
- On deemed / out of contract or standard variable tariffs
- On flexible purchase or similar contracts
- On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)
Businesses will receive a per-unit discount to their energy bills during the 12-month period, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold. For most businesses, these maximum discounts have been set at:
- Electricity – £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- Gas – £6.97 per MWh with a price threshold of £107 per MWh
‘The beginning of the end‘
The Federation of Small Businesses (FSB) have stated that the move is ‘the beginning of the end for tens of thousands of small businesses, which have been relying on the government energy support to survive this winter’.
Martin McTague, national chairman of the FSB, added: ‘Many small firms will not be able to survive on the pennies provided through the new version of the scheme. Two pence off a kilowatt-hour of electricity and half a pence of gas is totally insignificant for small businesses.’
Further information and guidance about the scheme can be found at https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers