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Energy costs support for businesses

Wholesale energy prices increased rapidly from the second half of 2021 onwards and are unlikely to improve in the short-term future. Businesses, public sector and voluntary sector organisations’ energy bills are increasing by substantial amounts as a consequence.

See details of available resources and advice to support businesses in York with the cost of energy.


Energy Bill Relief Scheme

The government announced a new Energy Bill Relief Scheme for non-domestic energy customers on 21 September 2022.

The scheme will provide a discount on non-domestic energy customers' gas and electricity unit prices. This includes:

  • all businesses
  • voluntary sector organisations, such as charities
  • public sector organisations, such as schools, hospitals and care homes

For all non-domestic energy consumers in Great Britain the government wholesale supported price has been set at:

  • £211 per megawatt hour (MWh) for electricity
  • £75 per MWh for gas

The level of price reduction for each business will vary depending on their contract type and circumstances.

It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.

It will run for an initial 6-month period for all non-domestic energy users and will apply to energy usage from 1 October 2022 to 31 March 2023. The savings will be first seen in October bills, which are typically received in November.

Customers do not need to take action or apply to the scheme to access the support. The support will automatically be applied to bills.

If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. The government has committed to announcing further detail on this shortly.

See full details of the government Energy Bill Relief Scheme.

This relief scheme will end in March 2023 and will be replaced by the Energy Bills Discount Scheme.

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Energy Bills Discount Scheme

The government announced a new support package for non-domestic customers on 9 January 2023 titled the Energy Bills Discount Scheme.

The new scheme will be available to everyone on a non-domestic contract including:

  • businesses
  • voluntary sector organisations, such as charities
  • public sector organisations such as schools, hospitals, and care homes

Who are:

  • on existing fixed price contracts that were agreed on or after 1 December 2021
  • signing new fixed price contracts
  • on deemed/out of contract or standard variable tariffs
  • on flexible purchase or similar contracts
  • on contracts paying energy costs above a price threshold

From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97 MWh automatically applied to their gas bill, and a unit discount of up to £19.61 MWh applied to their electricity bill.

This will be subject to a wholesale price threshold of £107 MWh for gas and £302 MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.

Customers do not need to apply for their discount. Suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

Energy and Trade Intensive Industries

The government recognises that those in energy and trade intensive industries (ETIIs) are less able to pass higher costs through to their customers, due to international competition. Therefore, a higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive.

See details of ETIIs in scope of the additional support:

For eligible ETIIs, the government is announcing:

  • these businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price
  • the price threshold for the scheme will be £99 MWh for gas and £185 MWh for electricity
  • this discount will only apply to 70% of energy volumes and will be subject to a maximum discount of £40 MWh for gas and £89.10 MWh for electricity

Businesses may need to register for the higher level of ETII support and details on how to apply will be released in due course.

For further details on the Energy Bills Discount Scheme, please refer to the government’s factsheet:

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Ofgem

Ofgem, the regulator for electricity and gas markets in Great Britain, provides official help on businesses energy complaints, microbusiness gas or electricity, and advice on energy efficiency schemes.

It has set up a dedicated page for businesses who cannot afford their energy bills.

See advice from Ofgem on getting help if your business can't afford its energy bills.

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Citizens Advice

If you're a small business that can't afford your energy bill, Citizens Advice has also set up a support page.

See information from Citizens Advice on what to do if your small business can't afford its energy bills.

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Energy efficiency measures

To help reduce your energy bills and reduce carbon, you may want to consider actions that can be taken to improve your businesses energy efficiency.

UK SME Business Climate Hub

The UK SME Climate Hub is a global initiative that aims to mainstream climate action in the small to medium sized business community.

They have partnered with The British Standards Institution (BSI) to supply 100,000 free copies of the energy management standard BS ISO 50005, ensuring that no matter what size an organisation is everyone can take the first step to a net zero future.

Energy management standards like BS ISO 50005 can help you control your energy usage and cut your energy bills. By showing you how to develop a practical, low-cost energy management system. The free standard helps SMEs identify quick wins in energy reduction, save money and build upon these successes over time.

Download your free energy management standard.

Federation for Small Businesses energy efficiency guide

The Federation for Small Businesses (FSB) have produced an energy efficiency guide as part of its Sustainability Hub.

The guide will help businesses earn how to monitor energy usage in their business and discover ways to reduce wasted energy, including heat controllers, insulation, and LED lights.

View the FSB Energy management plans: How to improve energy efficiency in your business.

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Also see

Economic Growth Team

West Offices, Station Rise, York, YO1 6GA