UK government to support businesses with cap on energy bills
UK government to support businesses with cap on energy bills – The scheme will run for six months and will start on October 1st which will improve business energy bills
The government has today announced that business energy bills are to be capped.
Officials have unveiled details of the much-anticipated package designed to help businesses that are currently on different types of contracts.
More specifically:
- Businesses on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1st April. Their energy costs will automatically be reduced by the relevant p/kWh for the duration of the scheme. Customers entering new fixed price contracts after 1st October will receive support on the same basis.
- Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price over the period of the scheme. The amount of this “maximum discount” is likely to be around £405/MWh for electricity and £115/MWh for gas.
- For businesses on flexible purchase contracts, typically some of the largest energy-intensive businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the “maximum discount”.
Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.”
What to do if your out of contract now?
If you are out of contract, Match Energy and the government strongly advise you to set up a contract now so your company will automatically have the appropriate reductions to your energy price for the duration of the scheme for six months
If your business is on ‘out of contract’ rates you only receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the 6 month period of the Scheme
Have you signed before the 1st April ?
If you signed before the 1st of April, you would have missed the cut off causing you not to be eligible for the new 6 month support scheme that will be implemented from the 1st October.
This is because you would not have been exposed to the recent rises in wholesale prices.
What to do if you are up for renewal after the scheme?
After analysis, the energy rates for businesses are forecasted to stay at the current price until summer time in 2025.
If your company is up for renewal after the scheme ends, get in touch with a member of the Match Energy team so we can assess the market and offer our professional advise for the best time for purchase your next energy contract.
If any of these questions relate to you and your business, get in touch now before its too late and you miss out on this support helping you through the winter months