The new Energy Bills Discount Scheme replaces the Energy Bill Relief Scheme that ended on the 31 March 2023. The new scheme will offer support to eligible non-domestic energy customers, including UK businesses. This also includes the voluntary sector, for example charities, and the public sector such as schools and hospitals.
Why has this scheme been put in place?
This scheme has been developed to help support UK businesses over the next year whilst at the same time limiting exposure of volatile energy markets on tax payers. A cap has been set at £5.5 billion based on estimated volumes.
How does the Scheme Work?
Under the new scheme, 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 with a price threshold of £107 per MWh and a unit discount of up to £19.61/MWh applied to their electricity bill with a price threshold of £302 per MWh. The relative discount will only be applied if wholesale prices are above the stated price thresholds.
Is there any further support for the most energy and trade intensive industries?
The government has also confirmed that a substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. These businesses will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40/MWh for gas with a price threshold of £99 per MWh and £89/MWh for electricity with a price threshold of £185 per MWh. This discount will only apply to 70% of energy volumes.
As with the original scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.
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