The Energy Bill Relief Scheme – the lowdown for businesses

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In late September the government announced that, alongside domestic customers, it will be providing UK businesses with an equivalent level of support through its Energy Bill Relief Scheme.

Of course we will all be aware the UK is in the midst of a cost of living crisis, and therefore this Scheme has been welcomed by the business community for its support in the short term.

But what exactly will it entail? We take a look below…

How will the Energy Bill Relief Scheme support businesses?

The Scheme will apply to:

  • Businesses
  • Voluntary sector organisations (e.g. charities)
  • Public sector organisations (e.g. hospitals, schools and care homes)

On the following energy contracts:

  • Existing fixed price contracts (agreed on or after 1st December 2021)
  • Those signing new fixed price contracts
  • Those on deemed / out of contract or variable tariffs
  • Those in flexible purchase or similar contracts

The reduction will be automatically applied to eligible bills, meaning no additional administration time for business owners or managers.

Examples of how various businesses will be impacted by this Relief has been outlined by the government:

A medium sized restaurant uses around 3.5 MWh of electricity and 4 MWh of gas each month. They are on a variable contract, giving them a current monthly energy bill of around £3,600 per month. As they are on a variable contract they can receive support up to the maximum discount (£345/MWh for electricity and £91/MWh for gas). Applying the maximum discount rates means that their monthly energy bill reduces by over 40%.

Currently the Scheme is set to run between 1st October 2022 and 31st March 2023, despite initial hopes that it may be extended beyond these dates, this now seems unlikely following the reversal of many aspects of early October’s ‘mini-budget’.

You can find more information and further examples here.