Gov't Outlines Energy Price Support For Business

The UK gov't has published its plans for assisting businesses with the rising cost of energy this winter.

• Link to press release here: https://www.gov.uk/government/news/government-outl...
• "Through a new Government Energy Bill Relief Scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers ... whose current gas and electricity prices have been significantly inflated in light of global energy prices."
• "It will apply to fixed contracts agreed on or after 1 April 2022...It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users."
• "the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter."
• At first glance, the energy support scheme for businesses seems to be roughly in line with the support suggested a couple of weeks ago, with the "less than half" language is roughly in line with expectations.
• Politically the impact of the support scheme will be felt in the medium term, through the winter months. While the package of support is substantial, energy bills for households and businesses could still double even with assistance in place. If this proves too much for many firms and hours are reduced or they fold, gov't could still face political blowback.