New ‘Energy Bills Discount Scheme’ for Businesses
The ‘Business Energy Support Plan‘ is due to expire in March, and calls had been made for its extension. Instead the new ‘Energy Bills Discount Scheme’ has been announced and will apply to businesses, charities and the public sector from April.
The new scheme will provide a discount to all eligible businesses and non-domestic energy users for a year.
The Government has said this balances support for businesses with taxpayer’s exposures with a cap set at £5.5 billion for the scheme.
Businesses who are identified as high energy users will receive a substantially higher level of support.
- From 1st April 2023 to 31st March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
- This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
- Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.
The Chancellor has also requested an update from OFGEM relating to their review of the non-domestic market, to arrive before the Budget. He has voiced concern that the recent reduction in prices of wholesale energy are not being passed on to businesses.
How has this been received?
In a word, badly!
The British Chamber of Commerce have said that the new ‘Energy Bills Discount Scheme’ represents an 85% reduction in the ‘financial envelope of support’ for businesses.
BCC director general, Shevaun Haviland, said: ‘Many businesses have been fighting for their survival for months, and rising energy costs have fast become the tipping point. While we welcome the 12-month duration of this package, its value is nowhere near far enough and means that for some firms, energy will now be a cost too far.’
Martin McTague, national chair of the Federation of Small Businesses (FSB) described the decision as a ‘catastrophic move’ that will ‘all but eliminate help … Many small firms will not be able to survive on the pennies provided through the new version of the scheme.’
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