What’s Up With the Energy Bill Relief Scheme?
During the autumn Mini‑Budget, the Chancellor, Kwasi Kwarteng, rolled out a new Energy Bill Relief Scheme. The goal? To help businesses—whether they’re a small‑biz start‑up, a charity, or a big public‑sector organization—keep their energy costs in check as wholesale prices surge.
How Does It Work?
- Businesses on a fixed price contract signed on or after 1 April 2022 get a discount.
- Those on a deemed or variable tariff also benefit, but the discount cap applies.
- With a flexible contract, the reduction hinges on the difference between their monthly weighted average baseload price and the government‑supported price.
The government has set the supported price at £211 per MWh for electricity and £75 per MWh for gas. All calculations compare the expected wholesale cost this winter with those baseline figures.
Why the Scheme Is A Game‑Changer
Energy costs are sky‑high, and this scheme guarantees that the wholesale part of your bill won’t eclipse the government’s baseline. Suppliers automatically apply the per‑kWh reductions to your invoices between 1 October 2022 and 31 March 2023. The savings should appear on your October bill, typically received in November.
The government will review the program after three months and decide whether to carry it forward beyond March for “vulnerable businesses.”
Who Gets the Perks?
- All organizations under a contract that’s fixed and signed after 1 April 2022.
- Those who’ve signed a new fixed tariff will automatically receive the benefit.
- Contracts before 1 April 2022 are excluded because they haven’t felt the sharp price climb.
And don’t worry—no action is required on your part. Your supplier does the math and applies the discount, while the government reimburse suppliers for the lower wholesale rates.
Need to Know If You Qualify
If your fixed tariff price is above the government‑supported price, you’re in the clear. But if your price is below the baseline, you won’t qualify. For variable contracts, the maximum discount is calculated against the average expected wholesale price over the six months.
It’s a good time to lock into a fixed tariff—this way you’re guaranteed the government‑supported price and avoid the roller‑coaster of variable rates.
What About Energy Efficiency?
While the announcement mentioned energy efficiency, it stopped short of giving concrete guidance or extra support. Businesses will need to roll up their sleeves and find ways to cut consumption on their own.
Bottom Line
Thanks to this scheme, businesses can breathe a little easier knowing the worst part of their energy bill—the wholesale chunk—is capped. Keep an eye on your invoices for that sweet discount, and remember: the sooner you lock in that fixed price, the more security you’ll have. Happy saving!
