From 1 April 2023, businesses in the UK will receive reduced energy bill support as the Energy Bill Relief Scheme comes to an end. The scheme launched in October 2022 capped energy prices for businsses; specifically at £211 per megawatt hour (MWh) for electricity and at £75/MWh for gas.
A new scheme is coming in to replace the old one: the Energy Bills Discount Scheme.
Under this new scheme there will no longer be a fixed maximum price on energy bills. Businesses will instead receive a per-unit discount on wholesale prices, but only when their wholesale prices are above £302/MWh for electricity and £107/MWh for gas.
In short, the amount businesses pay for energy is likely to increase.
Of course, it is impossible to know energy prices will do in the future. But what is certain is that Treasury is attempting to cut the cost of insulating the economy if gas and electricity prices continue to rise. The new scheme will run until March 2024 to avoid a “cliff-edge” end to support which businesses had raised concerns about.
What you can do right now
The first thing to do is to understand how the switch to the new scheme in April is likely to affect your energy bills. Look at your most recent bills to see your rate of usage and estimate how much your costs could increase under the new scheme. If you’re unsure, reach out to your energy provider and ask them how your specific situation will be impacted.
If you are already struggling with energy costs Ofgem and Citizen’s Advice have details on potential additional support. There is guidance on what to do if you cannot pay your bills, you’re already in debt to your supplier, or you’ve been told you will be disconnected.
For more business advice and information on the how the wider economy could affect your business, be sure to regularly follow our blog posts here.