UK Businesses to see government-funded cuts to energy bills this winter, from 1st October

Posted 21st Sep 2022
Update 4
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Update 09.30 21/09 - A support scheme has been announced for UK businesses and energy prices to be 'halved' this winter, the scheme will run for six months and will be reviewed after three months. Northern Ireland will have a very similar scheme alsio / run parallel. Information below and i will continue to update this thread.

Industry sources have been told to expect a universal scheme that will apply to all sectors of the economy when Business Secretary Jacob Rees-Mogg unveils details of the scheme at 9am.

All businesses in Britain and Northern Ireland will receive a discount on energy bills funded by taxpayer subsidy, the government is expected to announce on Wednesday.

Will update here as/when full details are announced.

Update 1:

Businesses to see government-funded cuts to energy bills this winter

A package of support for businesses has been announced by the government, with a discount on energy bills for all UK companies.

It will apply from 1 October - the date that energy bills are expected to rise again.

The discount will also apply to charities and public sector organisations.

Update 2:

Fixed contracts agreed on or after 1 April 2022, as well as deemed, variable and flexible tariffs, will be eligible.

The support will be automatically applied to bills so businesses do not need to apply to the scheme or take any action.

The government said the support would be equivalent to that given to households.

Update 3:

The government has set a discounted price per unit of gas and electricity, expected to be £211 per MWh for electricity and £75 per MWh for gas. This is less than half the wholesale prices expected this winter.

Update 4:

The scheme will run for six months, with a review after three months to consider whether it should be extended or whether specific sectors require more targeted support.

Businesses do not need to take action or apply to the scheme to access the support – it will be automatically applied to bills, the government said.

The deal includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The level of price reduction for each business will vary depending on their contract type and circumstances:

  • non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 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, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases. This is why the government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the government’s Energy Bill Relief Scheme support
  • 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 and will also be subject to the Maximum Discount

A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.

Press release - Government outlines plans to help cut energy bills for businesses


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