UK businesses given cap halving price paid for energy this winter | Energy industry


Businesses have received a package of emergency government support, including halving energy prices from October 1, to help them through the winter.

The government has stepped in to provide discounts on wholesale electricity rates for companies, charities and public sector organisations, including schools.

Under the plan, they will receive six months of support to protect them from soaring bills. Further support for companies in disadvantaged sectors will follow.

In announcing an energy support scheme earlier this month, Liz Truss said the government would “launch a new scheme for all non-domestic customers who would otherwise be at the mercy of high prices driven by Russia’s illegal war in Ukraine” . It also said: “Most UK non-domestic customers are trading fixed price energy.”

Regulator Ofgem’s energy price caps for ordinary households do not apply to businesses, meaning businesses will face higher bills than domestic consumers.

The government has now announced “supporting wholesale prices” – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half of the wholesale prices expected this winter. The changes will apply to new contracts from October 1, as well as fixed contracts signed from April 1.

Those on default, deemed or variable tariffs will receive a discount on the cost of energy per unit, up to the difference between the support price and the average expected wholesale price for the duration of the program, the government said. The amount of such a discount could be around £405 per MWh for electricity and £115 per MWh for gas.

For companies with flexible procurement contracts, typically some of the largest energy users, the level of emission reduction offered will be calculated by the supplier based on the specifics of the company’s contract.

Truss said the package of support to protect businesses would ensure businesses “can get through the winter”.

Before announcing their support, small business owners across the UK told the Guardian they were awake at night and worried they would not be able to survive the winter as energy bills were about to rise.



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