Government announces new Energy Bills Discount Scheme for businesses
Businesses will get government help with the high cost of gas and electricity beyond this March as a new scheme gives certainty for the agri-supply industry.
On 9 January the Government announced a new Energy Bills Discount Scheme to provide eligible UK businesses and other non-domestic energy users with a discount on high energy bills until 31 March 2024.
The Energy Bill Relief Scheme (EBRS), which was launched last October, will end on 31 March 2023.
A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive, including the manufacture of fertilisers, pesticides and agrochemical products, animal feed, and grain mill products.
A full list of eligible sectors can be found here.
Businesses on the list will receive a discount to gas and electricity bills based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.
As with the EBRS, businesses will not need to apply for the discount. Energy suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.
Visit the GOV.UK website for full details of the new scheme, see below for a summary.
Energy Bill Discount Scheme summary
For eligible non-domestic customers who have a contract with a licensed energy supplier:
- From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
- This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
For eligible Energy and Trade Intensive Industries:
- These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
- The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.
- This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.
- A full list of eligible sectors can be found here.
Agri-suppy industry's voice heard
The announcement comes after AIC made representations to Government on behalf of Members in the agri-supply industry.
In November, AIC's Head of Policy Ed Barker gave evidence to the Environment, Food and Rural Affairs (EFRA) Select Committee, telling MPs that support was desperately needed beyond March 2023.
Watch the video summary below.
Responding to the new scheme, AIC Chief Executive Robert Sheasby said: "We welcome the Government’s announcement of continued support for agri-supply businesses with the high cost of energy.
"Our Members need certainty to plan and advise their customers, and many have a significant draw on energy after March.
"This support will assist businesses in managing volatile energy prices, and recognises the important part that the agri-supply industry plays in the food supply chain.
"The AIC team will remain in close contact with government as the situation develops throughout this year."
Authors
Oli Hill
As Communications Manager, Oli creates and oversees the content published on AIC's website, emails, Member briefings, print publications, and social media.
