UK to halve business energy prices this winter
Published: Sep 22, 2022 08:34 PM
The wholesale price of gas and electricity for all non-domestic customers in the United Kingdom (UK) will be cut by half their anticipated level during this winter under a government support plan that was unveiled on Wednesday.

Under the new Energy Bill Relief Scheme, the discounted price will be available to all businesses, charities and public sector organizations, including schools and hospitals, between October 1, 2022 and March 31, 2023.

"To administer support, the government has set a supported wholesale price - expected to be 211 pounds [$238] per megawatt hour [MWh] for electricity and 75 pounds per MWh for gas, less than half the wholesale prices anticipated this winter - which is a discounted price per unit of gas and electricity," the government said in a press release.

Green levies for non-domestic customers will also be removed.

A review into the operation of this scheme will be published in three months, identifying the most vulnerable industries and informing decisions on future support after March 2023.

The support package was broadly welcomed by business groups and organizations but was also criticized for being short-termed and expensive.

The London-based Resolution Foundation think tank praised the scheme for striking "the right balance of tackling businesses' soaring bills, while avoiding offering support for businesses who don't need it."

However, the support package "could easily cost over 100 billion pounds," Emily Fry, an economist at the Resolution Foundation, said.

"The refusal to cover more of this cost with windfall and solidarity taxes will add pressure on the Bank of England to up the pace and scale of interest rate rises," she said.