The government has confirmed its new Energy Bills Discount Scheme due to come into effect to support non-domestic energy customers when the current scheme ends at the end of March 2023.
The new scheme will provide support for an additional year through to 31st March 2024, discounting high energy costs and offering greater support to more energy intensive sectors.
With wholesale gas prices now back to levels seen prior to the Russian invasion Ukraine, the new scheme aims to protect businesses from further energy price volatility over the next 12 months, with a cap set at £5.5 billion in support to ensure
From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97 per MWh automatically applied to their gas bill and a unit discount of up to £19.61 per MWh applied to their electricity bill, except for those benefitting from lower energy prices.
A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries, where prices will be capped by a maximum discount of £40.00 per MWh for gas and £89.10 per MWh for electricity.
The Chancellor of the Exchequer, Jeremy Hunt, said:
“My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.
“Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.
“Even though prices are falling, I am concerned this is not being passed on to businesses, so I’ve written to Ofgem asking for an update on whether further action is action is needed to make sure the market is working for businesses.”
The Chancellor also confirmed he has written to energy markets regulator, Ofgem, asking for an update in time for the Budget on the progress of their review into the non-domestic market. He has asked for their assessment of whether further action is action is needed to secure a well-functioning market for non-domestic customers following reports of challenges certain customers are facing, including in relation to the pricing and availability of tariffs, standing charges and renewal terms, and the ability of certain sectors to secure contracts.