UK government's £7 billion Energy Cost Relief program uplifts businesses

In a remarkable display of government support, the majority of businesses in the UK are now reaping the benefits of automatic energy cost reductions, courtesy of an extraordinary program that has already cost the government nearly £7 billion.

Similarly, in January, the Energy Bill Relief Scheme by the government offered help to businesses, the public sector and charity organisations. To put this staggering figure into perspective, it amounts to over £35 million per day.

These businesses, known as Non-Standard Customers, can now apply for bill assistance from April 2023 to March 2024, in line with the support offered to other customers under the government's Energy Bills Discount Scheme (EBDS).

In the wake of Putin's illegal war in Ukraine and its impact on global energy rates, the financial relief provided by this program holds the potential to be a lifeline for many Non-Standard Customers, helping to stabilise their cash flow. By delivering on its promise to safeguard jobs, bolster the economy and curtail inflation, the government is taking decisive action.

However, certain businesses, including large chemical plants and those responsible for critical national infrastructure, require a specially tailored assistance program to subsidise energy supply from providers exempted from licensing requirements. These exemptions are granted for various reasons, such as when suppliers operate on a small scale and have minimal impact on the energy system. Some businesses are also eligible due to their location on a private network or their direct engagement in the wholesale energy market.

The revised rate of support under the Energy Bills Discount Scheme, effective from April 1, reflects a significant decrease in wholesale energy costs since before Russia's unlawful invasion of Ukraine. Heat network operators and energy-intensive enterprises meeting specific criteria receive higher levels of assistance, with potential savings of up to 20 per cent on projected wholesale energy expenditures.

Minister for Energy Consumers and Affordability, Amanda Solloway, expressed her commitment to preserving the country's industrial legacy in the face of a volatile energy market following Putin's reprehensible actions. Solloway stressed that despite declining energy costs, it remains crucial to support vital UK industries, ranging from recycling and manufacturing to steel production.

The Minister reassured businesses that every effort is being made to ensure comprehensive support, even for those procuring energy through unconventional means. Solloway urged eligible customers to ascertain their eligibility without delay.

Frank Gordon, Director of Policy at the Association for Renewable Energy & Clean Technology (REA), welcomed the news that an increasing number of businesses are now benefiting from the Energy Bill Relief Scheme (EBRS) and the Non-Standard Cases Energy Bills Discount Scheme. Gordon emphasised the motivation derived from this progress, highlighting the potential for significant bill savings through the transition to renewable energy sources, including on-site clean energy production.

Starting on May 17, the UK government announced that companies and organisations working with license-exempt suppliers could also apply for retroactive assistance through the Non-Standard Cases Energy Bill Relief Scheme.

Those who received their license-exempt supply from the public grid had access to this assistance from October 2022 to March 2023. The government has now expanded the Non-Standard Cases Energy Bills Discount Scheme to include this cohort, enabling businesses sourcing energy from waste, anaerobic digestion and biomass plants to apply retroactively and match the assistance received by other businesses during the winter.

Applications for the new programs can be submitted by both license-exempt energy suppliers and their customers through the government website, with eligibility checks available on GOV.UK. Payments will be disbursed directly to the client or provider, depending on who applied.

Earlier in December 2022, the Confederation of British Industry (CBI) implored the UK government to present the specifics of how it intends to extend its energy bill relief scheme for significant energy users after the end of March 2023. The CBI further demanded "clarity on the Energy Bill Relief Scheme".

The UK government's resolute efforts to alleviate the burden of energy costs on businesses have undoubtedly made a significant impact. As the Energy Bill Relief Scheme continues to evolve, businesses can look forward to sustained support from the government.