The energy market has been in a volatile state for some time now and this article aims to explain the current support that is available to non-domestic customers and how this support will be changing from 1st April 2023.
This bulletin was released in early March 2023 and all information was correct at the time of release.
What support is currently available?
The Energy Bill Relief Scheme is available to all those on a non-domestic contract including businesses if they meet the following criteria:
- Are on existing fixed price contracts that were agreed on or after 1 December 2021
- Are signing new fixed price contracts
- Are on deemed / out of contract or standard variable tariffs
- Are on flexible purchase or similar contracts
Under this scheme, the government supported price has been set at:
- Electricity - £211 per megawatt hour (MWh) / 21.1p per kilowatt hour (kWh)
- Gas - £75 per MWh / 7.5p per kWh
This discount has been getting applied automatically without farming businesses needing to take any action.
What is going to change?
This support was always going to be time limited and intended as a bridge to given businesses time to adapt. The scheme was reviewed in January 2023 with the outcome being that the wholesale price of energy will be discounted rather than capped under a new Energy Bills Discount Scheme. This will come into force on 1st April 2023 and run until 31st March 2024.
The main difference with the new scheme is that support will come in two tiers and farming businesses are likely to receive the lower level of support. Businesses that are deemed to be the most energy intensive were decided as part of a government review and unfortunately farms have not been identified as one of those sectors. Those businesses such as food processors who are entitled to the higher level of support will have it administered via the Energy and Trade Intensive Industries Scheme.
The discount that will be given to farms under the new scheme is £19.61/MWh for electricity up to a £302/mWh threshold. While for gas it will be a £6.97/MWh discount up to a threshold of £107/mWh.
As with the current scheme, suppliers will automatically apply to the discount to bills for all eligible customers.
Sign up to the FAS newsletter
Receive updates on news, events and publications from Scotland’s Farm Advisory Service