Business energy price cap ending

Article posted

16th Feb 2023

Read time

6-11 min read


Mollie Pinnington

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What energy support for businesses is currently available?

Since October 2022, businesses have been on the Energy Bill Relief Scheme(EBRS). The EBRS scheme was introduced to help businesses cope with rising energy bills and remove the possibility of business closures.

This means currently those on a business energy contract should have this applied to their energy bills. This does however differ depending on the contract your business is on.

EBRS for Fixed rate contract

If your business is currently on a fixed rate contract will have been receiving a cap on the wholesale element of your gas and electricity bill. This has been agreed at 21.1 p/kWh for electricity and 7.5 p/kWh for gas.

EBRS for Deemed and variable contracts

Currently, those on Deemed and variable contracts will receive a maximum discount on the wholesale rate of their gas and electricity bills. This has been set at 34.5p/kWh for electricity and 9.1p/kWh for gas. The discount will be the difference between a deemed wholesale rate and a maximum of the amount above. This means that those on Deemed and Variable contracts are subjected to market developments.

The EBRS is still currently running until the 31st of  March when it will come to an end. Energy support will then be replaced by the Energy Bill Discount Scheme. 

To see more about the EBRS - continue reading here


What is the Energy Bill Discount Scheme

With the EBRS coming to an end the Energy Bill Discount Scheme (EBDS) will begin on 1st April 2023, to replace the current support.

The EBDS will add a discount to non-domestic energy bills once they have gone over a certain threshold price:

  • For electricity, if the wholesale portion of the bill rises over 30.2p/kWh then a maximum of 1.96p/kWh discount.
  • For gas, if the wholesale price rises over 10.7p/kWh then a maximum discount of 0.697p/kWh will be applied.

Like the EBRS, new support will be automatically applied to your energy bills if you signed after the 1st of December 2021. Instead of a 6 month period, the EBDS will run for a 12 month period from 1st April 2023 to 1st March 2024.

To see more about the EBDS - continue reading here


What is the difference between the business energy schemes?

Unfortunately to those struggling with their energy bills, the new support is not going to offer much business energy relief, as support is expected to reduce by around 90%.

Instead of adding a permanent price cap on wholesale gas and electricity prices, the Energy Bill Discount Scheme will only provide businesses with a small amount of relief on energy costs when prices go above a certain amount.


How will these changes affect businesses?

Realistically with current business struggles this scheme is not going to offer much support to companies that are struggling to make ends meet.

As this is a huge reduction in support, if your business was struggling with energy bills before then they are going to be much worse in April.

Typically, smaller businesses are expecting to struggle with higher energy prices. Read more here


Frequently asked questions about energy support for businesses

How do I access business energy support?

You do not have to do anything to access business energy support, this will be automatically applied to those who signed their contract after 1st December 2021. Business owners and those who deal with the energy bills within a business should be aware of energy scams that might tell you otherwise. Read more here about how to avoid business energy scams.

Why has energy support been reduced?

The reason the government have reduced support was due to rising costs for the taxpayers. The EBRS has been estimated to cost the government about £18Bn, whilst the EBDS is estimated to cost around £5.5Bn. The government have said that the original package for businesses was not sustainable and would expose taxpayers to further price volatility from the energy market.

When does the energy bill relief scheme come to an end?

The Energy Bill Relief scheme comes to an end on the 31st of March 2023 and the Energy Bill Discount scheme will begin on the 1st of April 2023.

Does the scheme differ for businesses on Default and variable tariffs?

No, the discount will apply regardless of what type of contract a business is on. However, with the current price volatility your business is going to be more protected on fixed rate contract than you would be on a variable contract.

Why have I not received any energy support?

There have been some reports of businesses not receiving any support at all. There has been ongoing investigations from Ofgem to resolve this. If you think that your business may have been affected by this you should contact your energy supplier. If you are one of our customers get in touch with your account manager today to see if we can resolve the issue for you.

Will there still be an energy price cap?

No, there will be no price cap for non-domestic energy bills on a discount when energy bills go above a certain price threshold.

What happens if I can't afford my energy bills?

If you are struggling to pay your bills, you should get in touch with your energy supplier as soon as possible. If you own a micro business that can longer afford the price that your energy contract was agreed at, there is certain help available to reduce the pressures on your business.


What can Resolve Energy do to support your business

At Resolve Energy we can offer your business a range of solutions that could help you to manage your company’s energy bills and bring overhead costs down. We have a team of energy consultants that can find you the most competitive prices for your energy and advise your team as to what contract you should be on for your business.

Along with making sure you are not paying too much for your energy, we also offer services in line with reducing your consumption and increasing your business’s sustainability. See more at Resolve Net Zero

If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.

Looking to pay less on your energy bills?

Get a free quote today