Alfa Energy (an Edison Energy company) comments on press reports suggesting an extension of the Energy Bill Relief Scheme to businesses.
[LONDON, UNITED KINGDOM, December 16, 2022] — Press reports suggest the government is considering prolonging aid to limit the impact of high energy bills on business users, although probably in a modified form: Hunt looks at prolonging energy aid for all companies | Financial Times (ft.com).
The current scheme caps the wholesale element of business users’ energy bills at £211 per MWh for electricity and £75 per MWh for gas. well below market rates. It was initially intended to run from 01 October 2022 to 31 March 2023, with a review within the first three months to inform decision making about any future support that might continue after March 2023.
The energy crisis is far from over and the impact of high prices on vulnerable UK businesses looks set to remain a concern for some time to come. Simply allowing aid to cease after April 2023 is not therefore an attractive option, but the cost of providing universal support at current levels is unsustainable so the government is looking for ways to target aid towards the most vulnerable energy users. This would be relatively straightforward for energy intensive industrial users, but not so easy in practice for smaller businesses, so there is a risk some vulnerable businesses might miss out on the aid they need.
The government is therefore understood to be considering a lower level of universal support, combined with more generous aid for energy intensive users.
Jeremy Nicholson, Corporate Affairs Officer at Alfa Energy, commented:
“There’s a genuine dilemma here for government: universal energy aid to business is unsustainable at current levels. Yet a cheaper fully targeted alternative would be difficult to implement in practice and likely to leave some vulnerable businesses totally unsupported. A hybrid scheme with a lower level of universal support, with additional support for vulnerable energy intensive industries, seems a workable alternative.”
“Businesses need to plan ahead, so we hope the government will be able to confirm what will happen to their energy bills in April 2023 as soon as possible.”
Details of the current Energy Bill Relief Scheme are available here:
Energy Bill Relief Scheme: help for businesses and other non-domestic customers – GOV.UK (www.gov.uk)
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