The Energy Bill Relief Scheme for businesses
Read more about the scheme and how it intends to support UK businesses.
The Energy Bill Relief Scheme - what you need to know
On 21 September, the government department for Business, Energy and Industrial Strategy (BEIS) announced the Energy Bill Relief Scheme (EBRS) for business energy customers in Great Britain.
It has been designed to reduce business energy consumers’ exposure to the volatile wholesale energy markets over the next six months and sees the government commit to providing a discount on wholesale gas and electricity prices for all non-domestic customers.
The discount will run for an initial six-month period, starting after 1 October 2022.
Customers do not need to take action to access support, as the discounts will be automatically applied to eligible energy bills, with savings set to be first seen against October's consumption.
Customers on a fixed, flexible or default contract may be eligible for the scheme. The discount will run for an initial six-month period, starting on 1 October 2022. Discounts will start to be applied to eligible November invoices (for October’s consumption) and then will continue to be applied during the supported scheme period which is due to end on 31 March 2023.
The discounts will automatically be applied from November invoices for October's energy consumption. A floor price has been introduced to ensure prices do not fall below 21.1p/kWh for electricity or 7.5p/kWh for gas.
NEW FIXED PRICE CONTRACTS
As new fixed-price contracts will be signed after 1st December 2021, these customers will be eligible for the EBRS discount in the same way as existing fixed-price contracts.
All flexible contract customers will be eligible for the EBRS discount. If you’re on a flexible purchase contract, your price reduction will depend on the difference between your monthly weighted average baseload price (determined by your individual hedging approach) and the government supported price. In this case the maximum support available per unit of energy will also be limited by the maximum discount and the floor price.
OUT OF CONTRACT (DEEMED AND EXTENDED)
All deemed or extended supply contracts will be eligible for the EBRS discount. The discount will reflect the difference between the government-supported price and the relevant wholesale price but is subject to a ‘maximum discount’ (£345/MWh for electricity and £91/MWh for gas). An additional reduction has been given by the government for all Qualifying Financially Disadvantaged Customers (QFDC). Shell Energy has taken the decision to categorize all Deemed and Extended supply customers as QFDC and all relevant customers will automatically receive this additional QFDC discount. Read more in our guide below.
To find out more about the Energy Bill Relief Scheme or discover other useful articles and blogs, please visit Energy Insights which is your hub of useful resources.
Many different solutions are needed for a successful transition to a lower-carbon world. Shell Energy can tailor solutions that aim to avoid, reduce or compensate for the emissions of your business.
Our FAQS about the Energy Bill Relief Scheme
This support is targeted at all non-domestic energy consumers, this includes businesses, charities, and public sector bodies. The only exclusion is if a customer is using power or gas to produce energy to the grid. If a customer isn’t eligible for the domestic tariff cap and energy bill support scheme, they are likely to be eligible for this support. This support will be provided automatically by energy suppliers.
All non-domestic customers may be eligible for support under this scheme. This includes fixed, flex and deemed and extended supply contracts.
Non-domestic customers on a fixed contract will be eligible for this scheme if they are on a fixed price contract that was agreed on or after 1 December 2021. Originally this date was published by government as 1 April 2022, it has since been extended to include more customers.
All deemed and extended supply customers will be eligible for this scheme. Flexible energy supply contract customers will be eligible however, their specific discount will depend on their individual circumstances.
The support will show as a discount on customer’s invoices from November 2022 for October's consumption.
In simple terms, your energy invoice is made up of two elements – commodity and non-commodity costs. Commodity costs relate to the wholesale element (electricity or gas) of your bill. As of 1 October 2022, commodity costs were roughly 86% of your electricity cost and 95% of your gas cost.
Non-commodity costs relate to the other charges incurred such as distribution and transmission of energy, the cost of running, operating and maintaining our energy network and government taxes and levies. As of 1 October 2022, non-commodity costs were roughly 14% of your electricity cost and 5% of your gas cost.*
The Energy Bill Relief Scheme discount focuses on the commodity element of your energy invoice. Whilst green levies will continue to be listed and charged as usual, the government have created the discount taking into consideration a lower charge for these costs. The government supported price and discount takes these into account.
Standing charges will not be impacted or reduced by the Energy Bill Relief Scheme.
* Data from late September 2022 based on our view of "standard" energy contracts which we track over time.
No, you do not need to apply for the Energy Bill Relief Scheme. As your supplier we will work alongside the government to ensure those eligible receive the discount. If you receive an email or text asking to click on a link to apply or fill in any bank details or personal information, then we recommend you ignore it and delete the message. It is likely to be a scam.