Support for non-domestic energy customers amid high prices is to cut from April. A new scheme being introduced by the UK Government will provide help until March 2024.
Under the Energy Bills Discount Scheme (EBDS), eligible businesses, public sector organisations and charities will benefit from a per-unit discount on bills.
A discount of up to £19.61/MWh hour for electricity and £6.97/MWh for gas will be automatically applied. The discount will be applied if wholesale prices are above a price threshold of £302/MWh for electricity and £107/MWh for gas. The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold.
The Government said the scheme will cost up to £5.5bn, less than a third of forecast costs for the current support package.
It said it had been clear that current levels of support were time-limited and intended as a bridge to allow businesses to adapt, and that the EBDS strikes a balance between supporting businesses and limiting taxpayer’s exposure to volatile energy markets.
However, Shevaun Haviland, Director General of the British Chambers of Commerce, said: “Despite Government efforts, an 85% drop in the financial envelope of support will fall short for thousands of UK businesses who are seriously struggling.
“While we welcome the 12-month duration of this package, its value is nowhere near far enough and means that for some firms, energy will now be a cost too far.”