UK businesses given six-month emergency energy price cap


Businesses have been given an emergency package of government support including a cap significantly reducing the price paid for energy from 1 October to help them get through the winter.

The government has stepped in to discount wholesale power prices for companies, charities and public sector organisations, including schools.

Under the plan, they will be given support for six months to protect them from soaring bills. Further support will be offered to companies in vulnerable industries after that.

On announcing an energy support package earlier this month, Liz Truss said the government would “launch a new scheme for all non-domestic customers who would otherwise have been at the mercy of high prices driven by Russia’s illegal war in Ukraine”.

The business department has now announced a “supported wholesale price” expected to be £211 per megawatt hour for electricity and £75 per megawatt hour for gas, which it said would be less than half the wholesale prices anticipated this winter. The changes will apply to new contracts from 1 October, and to fixed contracts taken out since 1 April.

The government said 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 discount is likely to be about £405 per megawatt hour for electricity and £115 per megawatt hour for gas.

For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract.

Truss said the package of support to protect firms would ensure businesses “are able to get through the winter”.

Before the support was announced, small business owners across Britain told the Guardian of sleepless nights and fears they will not survive the winter due to looming increases in their energy bills.

Source: The Guardian