This scheme will provide energy bill relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023.
The scheme will be available to everyone on a non-domestic contract including:
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals and care homes
- on existing fixed price contracts that were agreed on or after 1 April 2022
- signing new fixed price contracts
- on deemed / out of contract or variable tariffs
- on flexible purchase or similar contracts
The scheme is intended to be of broad application but there may be very limited exclusions, for example businesses that use gas or electricity for the purpose of generating power they are selling back into the grid, such as power stations, pumped hydro or grid-level battery storage.
The government will provide a discount on your gas and electricity unit prices. To calculate your discount, the estimated wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter.
For all non-domestic energy users in Great Britain this government supported price has been set at:
- £211 per megawatt hour (MWh) for electricity
- £75 per MWh for gas
For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
- £600 per MWh for electricity
- £180 per MWh for gas
Suppliers will apply reductions to the bills of all eligible non-domestic customers.
The government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that they are passing onto non-domestic customers.
The discount applied will be in pence per kilowatt hour (p/kWh). The p/kWh government support for comparable contracts will be the same across suppliers, but the absolute level of individual bills will continue to vary across different contracts and tariffs.
For fixed contracts the discount will reflect the difference between the government supported price and the relevant wholesale price for the day the contract was agreed. The government will publish the wholesale prices we will use for calculating this for each day from 1 April 2022.
For variable, deemed and all other contracts, the discount will reflect the difference between the government supported price and relevant wholesale price, but be subject to a ‘maximum discount’ that will determined at the beginning of the scheme.
Businesses on variable / flexible contracts will need to choose if they move to fixed contracts. This is likely to suit you if you don’t want to be exposed to price variation. You will be contacted by your supplier.
The p/kWh government support for comparable contracts will be the same across suppliers, but the absolute level of individual bills will of course continue to vary.
Third party intermediaries (TPIs) / energy brokers have no influence over the per unit cost reductions that will be applied to energy costs under the scheme. You do not have to take out a new contract or change your contract for appropriate reductions to automatically be applied to your bills.
To see full details of the scheme and how it will be applied to your business, click here to see the latest guidance.