UK Government Outlines Plans toHelp Cut Energy Bills forBusinesses

New support for households, businesses and public sector organizations facing rising energy bills in Great Britain and Northern Ireland has been unveiled by Business Secretary Mr Jacob Rees-Mogg supporting growth, preventing unnecessary insolvencies and protecting jobs. Through a new government Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices. 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 apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6 month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November. To administer support, the government has set a Supported Wholesale Price – expected to be GBP 211 per MWh for electricity and GBP 75 per MWh for gas, less than half the wholesale prices anticipated this winter, which is a discounted price per unit of gas and electricity The level of price reduction for each business will vary depending on their contract type and circumstances. For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount. A parallel scheme, based on the same criteria and offering comparable support, but recognizing the different market fundamentals, will be established in Northern Ireland. UK Steel’s Director General Mr Gareth Stace said “The Business Secretary’s announcement demonstrates that this new Government understands the sheer scale of the issue and the need to deliver a significant solution swiftly. Setting a price cap for electricity at GBP 211 per MWh for six months gives foundation sectors, such as steel, the chance to get through the winter by giving us a competitive business landscape. The Government has clearly listened to sectors such as steel, estimated the enormity of the challenge that energy intensive sectors face, and today has delivered.” Mr Stace “It is essential that Government is now ‘fleet of foot’ if the situation develops further ensuring that British business is competitive within Europe and across the World. If we have parity on energy prices, then we can make steel competitively and provide well-paid and highly skilled jobs in areas of the UK where governments have more recently looked to level up. The Government must now move to rapidly reform the energy market to ensure longer-term competitive price beyond the current price cap. The steel industry stands ready to work with Government to demonstrate the benefit that the announcement today will have on our foundation sector and to reform the energy market so that we are not in the same position this time next year.” Prior to this intervention, UK Steel analysis showed that UK steel producers faced significantly higher electricity prices than their European competitors, with the price disparity skyrocketing since energy prices increased. The price cap is at 4-5x the historical average, but the critical issue for the steel industry is competitive electricity and gas prices, in line with European and global competitors.

UK Government Outlines Plans toHelp Cut Energy Bills forBusinesses

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