Monday 26th September 2022
Written by Adam Franks
Cut through the jargon of the Energy Bill Relief Scheme and implement a medium-term purchasing strategy for your business, designed to minimise your energy costs after the price cap ends.
Why is the support not the same as the domestic price cap?
The Energy Bill Relief Scheme is designed to give equivalent support to the Energy Price Guarantee put in place for households.
However, with business energy costs, bigger consumers tend to pay higher standing charges and higher non-commodity charges (the non-energy element of your unit price).
It therefore wouldn’t be fair to put a blanket unit price and blanket standing charge in place as was done for households.
How does this ‘business price cap’ work?
The support essentially puts a cap on the wholesale electricity and wholesale gas element (commodity cost element) of your unit price until Spring 2023.
It will be applied to energy usage from 1st October 2022 to 31st March 2023, running for an initial 6-month period.
The framework will see the commodity element of the unit price capped at £211 per MWh for electricity (21.1p/KwH) and £75 per MWh for gas (7.5p/KwH).
Who is covered by this ‘price cap’?
Discounts awarded by the scheme will apply to fixed contracts agreed on or after 1st April 2022, as well as to deemed, variable and flexible tariffs and contracts.
Customers will not have to actively apply to the scheme. Support will automatically be applied to bills.
However, different levels of support will be paid depending on your contract status. Please contact us for more details.
What does the energy commodity market price look like for the period after the cap ends?
It is nowhere near as bad as it is now, but it is very volatile. A purchasing strategy, and timing the signing of the renewal is more important than ever before.
Working with an expert who considers what is best for your business is more important than ever.
What should I do now?
You need to make sure you have the right contract term (contract end date) in place now, to ensure your energy cost is at a minimum after the cap ends.
It’s a simple strategy, but one that is not being followed by many businesses entering into new contracts over recent days.
Please Get in touch for a no-obligation consultation with one of our energy experts.