The Energy Bill Relief Scheme

(Updated 01/11/22)

The government recently announced their Energy Bill Relief Scheme, providing significant assistance with the cost of gas and electricity for all businesses, large and small, from the 1st of October 2022. The full benefit of the government support scheme will be applied automatically to your bills for all energy consumption from the 1st of October.

What is the Energy Bill Relief Scheme?

Through the new Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector – such as charities, and the public sector – including schools and hospitals) whose current gas and electricity prices have been significantly inflated due to the increase in global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.

Who does it apply to?

It will apply to eligible businesses with fixed contracts agreed on or after 1st December 2021 (the government had previously announced 1st April 2022), as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1st October 2022 to 31st March 2023, running for an initial 6 month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

How do I apply the discount?

The full government grant discount will be applied automatically for eligible customers. You will see this line on the second page of your bill, under your Charge Details – Additional Charges. Discounts will be worked out in accordance with the governments pricing matrix. The example below shows the Energy Bill Relief Scheme credit for 201.3 kWh x the discount amount for this contract, and illustrates where the line can be found on the second page of your bill. If you do not see a credit applied to your bill, please check your contract start date. If your contract was agreed before the 1st December 2021, unfortunately, you are not eligible for the government discount.

Example Business Energy Savings

A Pub

A pub uses 4 MWh of electricity and 16 MWh of gas a month. They signed a fixed contract in August 2022, giving them a current monthly energy bill of about £7,000. At the time they signed their contract, wholesale prices for the next 6 months were expected to be higher than the Government Supported Price of £211/MWh for electricity, and £75/MWh for gas, meaning they can receive support under this scheme.

The difference between expected wholesale prices when they signed their contract and the Government Supported Price is worth £380/MWh for electricity and £100/MWh for gas, meaning they receive a discount of £3,100 per month, reducing their bill by over 40%.

A School

A school uses 10 MWh of electricity and 22 MWh of gas a month. They signed a fixed contract in July 2022, giving them a current monthly energy bill of about £10,000. At the time they signed their contract, wholesale prices for the next 6 months were expected to be higher than the Government Supported Price of £211/MWh for electricity, and £75/MWh for gas, meaning they can receive support under this scheme.

The difference between expected wholesale prices when they signed their contract and the Government Supported Price is worth £240/MWh for electricity and £70/MWh for gas, meaning they receive a discount of £4,000 per month, reducing their original bill by 40%.

The Energy Bill Relief Scheme will be a significant help to businesses across the country and we welcome the governments support with rising energy costs. If you have any questions surrounding the Energy Bill Relief Scheme, or would like to inquire about your renewal, please contact the Yu Energy team who will be happy to advise.