The Prime Minister announced on Thursday 8 September that typical households will pay no more than £2,500 a year on gas and electricity bills from 1 October, through the Energy Price Guarantee (EPG). But we know business owners are very worried about rising energy costs too, so here we outline the energy support coming for them – as much as we know so far.
For households, Liz Truss confirmed that the new price guarantee will last for two years and will be paired with both the existing Energy Bill Support Scheme (EBSS), which will provide £400 support to households, and a £150 saving, brought about by a temporary suspension of green levies on energy bills.
Households which do not pay direct for mains gas and electricity – such as those in park homes or on heat networks – will receive support through a new fund.
The new guarantee will apply to households in Great Britain, with the same level of support made available to households in Northern Ireland.
The government will also support business, charities and public sector organisations with their energy costs this winter, providing an equivalent guarantee for six months.
In addition, HM Treasury announced a joint scheme, working with the Bank of England, to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and/or electricity markets. The scheme aims to provide resilience to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers.
The government also announced a new Energy Supply Taskforce to agree long-term contracts that reduce the price they charge for energy and increase the security of its supply.
The Chancellor of the Exchequer will set out the expected costs as part of the fiscal statement later this month.
The Department for Business, Energy & Industrial Strategy has produced a factsheet which outlines the Energy Price Guarantee support for households, and support for businesses and non-domestic consumers with energy bills.
What energy support is coming to help businesses with rising energy bills?
As businesses have not benefited from an energy price cap and are not always able to fix their energy price through fixed deals, many are reporting projected increases in energy costs of more than 500 per cent.
A new six-month scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools) will offer equivalent support as is being provided for consumers. This will protect them from soaring energy costs and provide them with the certainty they need to plan their business.
After this initial six-month scheme, the government will provide ongoing, focused support for vulnerable industries. There will be a review in three months’ time to consider where this should be targeted to make sure those most in need get support.
The government will provide energy suppliers with the difference between this new lower price, and what energy retailers would charge their customers were this not in place. Schemes previously funded by green levies will also continue to be funded by the government during this two-year period to ensure the UK’s investment in home-grown, secure renewable technologies continues.
Whilst the intervention will be funded by the government, action is being taken to significantly reduce the cost over time, including:
* A new Energy Supply Taskforce – led by Madelaine McTernan who headed up the UK’s successful Vaccine Taskforce – has begun negotiations with domestic and international suppliers to agree long-term contracts that reduce the price they charge for energy and increase the security of its supply. The Taskforce and Department for Business, Energy and Industrial Strategy will negotiate with renewable producers to reduce the prices they charge as well.
* HM Treasury is announcing a joint scheme, working with the Bank of England, to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets. The Energy Markets Financing Scheme will enable stability to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers. The scheme will provide short-term financial support and will be designed to be used as a last resort.
The government is also taking action to accelerate domestic energy supply, increase our country’s energy resilience and achieve the ambition to make the UK an energy exporter by 2040. The plans are to:
* Launch a new oil and gas licensing round as early as next week, expected to lead to over 100 new licences.
* Lift the moratorium on UK shale gas production. This will enable developers to seek planning permission where there is local support, which could get gas flowing in as soon as six months.
* Drive forward the acceleration of new sources of energy supply from North Sea oil and gas to clean energy like nuclear, wind and solar.
* Continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set direction of getting new nuclear projects online in the UK.
* Undertake fundamental reforms to the structure and regulation of energy market through recommendations from a new review of the UK Energy Regulation.
* Launch a review to ensure we are meeting our Net Zero 2050 target in an economically-efficient way, given the altered economic landscape. Chaired by Chris Skidmore MP and reporting by the end of this year, it will ensure delivering the target is not placing undue burdens on businesses or consumers.
We will bring you more information on energy support when we have it.
Using less energy creates a huge cost saving and is of course better for the environment. We’re constantly gathering ways to make your Sandwell business more sustainable: visit our Going greener page for the latest.