The government’s recently announced Energy Price Guarantee will only continue in its current form until April 2023.
What is the Energy Price Guarantee?
The support scheme was announced by the government in September to reduce the impact of the energy price cap rise and was due to be in place for two years.
It was announced that average household bills would be no more than £2,500 under the Energy Price Guarantee, which caps the price per unit of gas or electricity.
The government pledged to compensate energy firms for the difference between wholesale energy prices and the amount charged to consumers.
On the 21st September, the government extended the support to non-domestic energy customers such as businesses, SME, charities and public sector organisations cut. The Energy Bill Relief Scheme (EBRS) will offer discounts for all firms for six months from 1st October 2022.
The scheme applies to fixed contracts agreed on or after 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. The savings will be first seen in October bills, which are typically received in November.
As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.
How will the Energy Price Guarantee change after April 2023?
The new chancellor announced that the government is now reviewing the cap on the unit price of energy.
After April, the government will introduce a “new approach” to energy bills that will “cost the taxpayer significantly less”, however no details have yet been revealed.
The announcement came as part of the government’s new fiscal plan, which reversed many of the tax measures announced in the ‘mini-budget’ and aims to generate more revenue for the Treasury.
The two-year energy price guarantee was “the biggest single expense in the growth plan”, which was unveiled by then-chancellor Kwasi Kwarteng. Much of the plan has since been reversed after it caused volatility in financial markets.
Discussing the Energy Price Guarantee during a speech on October 17th, Jeremy Hunt said: “This is a landmark policy supporting millions of people through a difficult winter and today I want to confirm that the support we are providing between now and April next year will not change.
“But beyond that, the prime minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.
“So, I’m announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.”
What support will remain in place for business energy customers?
Hunt confirmed that there will be no changes in the support provided to businesses between now and next April. After that date, he said that support for businesses will “be targeted to those most affected” and that the new approach will “better incentivise energy efficiency”.
What measures can businesses take to keep their energy bills as low as possible in 2023?
Our previous blog outlined a series of support schemes on offer for small businesses struggling to save their energy bills, as well as tips to reduce energy outgoings.
A range of business finance schemes and grants, as well as government and regional schemes, are available to help SMEs combat rising energy prices.
In addition, your commercial energy provider may be able to offer a business grant to help you improve your business energy efficiency. These could include subsidies on the upfront costs for more energy-efficient equipment.
Having a smart meter installed can save businesses around 10% on their annual fuel bills and improving the efficiency of heating systems, insulation, and even switching to energy-saving lightbulbs can make a big difference.
How can Enexus help businesses combat rising energy prices?
Enexus Energy develops bespoke, innovative strategies to optimise the way your business purchases, generates and consumes energy.
We can help you take proactive measures for your 2023 business energy contracts. We can track the market on your behalf, source the very best prices and suggest alternative contract structures to ensure you buy energy in the most cost-effective way. We can also help you reduce consumption and guide you to lasting savings on your energy costs.
To see how we can help, please get in touch:
Tel: 01253 966 960