What extra support on energy bills are businesses and charities getting?

The Government has announced a new set of support for non-domestic energy customers that will extend past April.

The support is less generous than what had come before, but will give businesses and other organisations some kind of help.

But what help will they get, how’s it different to before, and who will get it?

We explore some of the details below.

– Who is eligible?

All organisations that were eligible under the current set of support will continue to see their energy bills cut automatically from the start of April.

This will include businesses, voluntary sector organisations, such as charities, and public sector organisations, such as schools and hospitals.

– What will they get?

The eligible organisations will see their energy bills discounted automatically by the Government, working with their energy supplier.

The plan will take up to £6.97 off bills for every megawatt hour (MWh) of gas that an organisation uses, and £19.61 per MWh off electricity bills.

An online energy bill (Jacob King/PA)
An online energy bill (Jacob King/PA)

This discount will only kick in when gas prices are more than £107 per MWh for gas and £302 per MWh for electricity. If bills are lower then businesses will not get any support.

– How long will it last?

The new scheme will add an extra 12 months of support, running from the start of April this year to the end of March 2024.

– Are there any special cases?

Yes, so-called “energy and trade intensive industries” will be allowed extra support under the scheme.

These businesses are eligible for a maximum £40 per MWh of gas and £89.10 per MWh of electricity.

– How much will it cost?

The new scheme is expected to cost around £5.5 billion over the 12 months that the scheme lasts.

This is considerably less than the £18 billion that is expected to have been paid out in the six months that the old scheme lasted.

– What had organisations been given before? 

Between the start of October and the end of March businesses, voluntary sector organisations, such as charities, and public sector organisations, such as schools and hospitals, had been able to claim support.

The Treasury discounted the energy bills for these organisations by setting a so-called “Government-supported price” of £211 per megawatt hour (MWh) of electricity and £75 per MWh of gas.

Energy costs
A gas hob (Yui Mok/PA)

At the time it was announced electricity prices had been around £600 per MWh and gas prices £180 per MWh.

– Why has it changed? 

Simply put, ministers did not want to keep shelling out billions of pounds each quarter to help the businesses with their bills.

Chancellor Jeremy Hunt called it “unsustainably expensive”.

The new system will still be expensive, but far from the £18 billion that the old scheme is estimated to cost the Treasury over six months.