Further details around the UK Government’s energy support package for business have been announced today, 21^st September 2022, ahead of winter.

Under the Energy Bill Relief Scheme the following support will be provided from 1st October 2022 to 31st March 2023 and such support (in the form of a p/kWh discount) will automatically be applied to bills;

Fixed contracts signed after 1st April 2022

• Wholesale power prices are capped at 21.1 p/kWh (Supported Price of £211 MWh)
• Wholesale gas prices are capped at 7.5 p/kWh (Supported Price of £75 MWh)
• Wholesale price caps have been set at a level to remove green levy costs
• Non-commodity costs, risk premium and supplier margins will be added to the wholesale costs (as per existing contract terms)

Flexible contracts (purchases after 1st April 2022)

• Wholesale prices are capped in line with the Supported Price levels (see above), subject to a Maximum Discount
• Price reductions will be applied as the difference between your monthly weighted average baseload price and the Supported Price level, again subject to a Maximum Discount
• Maximum Discount is the maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme
• The Maximum Discount is now confirmed as £345 MWh for electricity and £91 MWh for gas
• Non-commodity costs, risk premium and supplier margins will be added to the wholesale costs (as per existing contract terms)

Default, deemed or variable tariffs 

• Default, deemed or variable tariffs will receive a per-unit discount on energy costs, subject to a Maximum Discount (see above)
• Non-commodity costs, risk premium and supplier margins will be added to the wholesale costs (as per existing contract terms)
• These 'out of contract' rates are likely to remain at high levels this winter as a significant component of the price is risk premium

Adalta Energy therefore encourages all businesses to ensure they have an appropriate contract in place prior to the 1^st October 22.

Full details, as released by the UK Government, can be found here. A review of the scheme will be published in 3 months to inform future support, including how the Government would identify most vulnerable businesses and continue to assist.

Adalta Energy understands that this is an uncertain and extreme time for UK business. If you have any questions on the ongoing energy crisis or require any assistance, then please contact enquiries@adaltaenergy.co.uk or call Ed Butler directly on 07989 431184. Alternatively, if you are an existing Adalta Energy client then please speak directly with your dedicated contact.

Updates

1st October 2022 - Maximum Discount has been set at £345 MWh for electricity and £91 MWh for gas (initially indicated at £405 MWh for electricity and £115 MWh for gas)

21st September 2022 - first published