News & Publications

21/09/2022 – Business energy prices to be cut by half expected levels

Energy bills for UK businesses will be cut by around half their expected level this winter under a huge government support package.

The scheme will fix wholesale gas and electricity prices for firms for six months from 1 October, shielding businesses from crippling costs.

Hospitals, schools and charities will also get help, the government said.

It comes after ministers announced a £150bn plan to help households with their soaring bills for two years.

Industry groups welcomed the package but warned further support may be needed after the winter.

It is understood the scheme will be reviewed after three months with an option to extend support for “vulnerable businesses” – but it is not known what sectors come under the category.

Wholesale prices, which are what suppliers pay for energy in bulk before they distribute it to customers, are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas.

Those rates will be the base cost, to which other add-ons, such as standing charges will be added by suppliers.

Independent analysts Cornwall Insight said this marked a “substantial” 45% discount on wholesale energy prices at the end of last week.

The government said the scheme would apply to companies which had agreed fixed deals at higher prices on or after 1 April, when energy bills started to surge. Those on variable and flexible tariffs will also be eligible.

Companies do not need to contact suppliers as the discount will automatically be applied to their bills, with savings seen from October but received from November.

Prime Minister Liz Truss said the government understood the “huge pressure businesses, charities and public sector organisations are facing with their energy bills”.

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind,” she said.

“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

The support will apply to all non-domestic energy customers in England, Scotland and Wales. A scheme offering comparable support will be established in Northern Ireland.

Source: BBC News