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Industry reaction to the Energy Bills Discount Scheme

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Eligible energy-intensive industries will receive a discount on what they pay for their gas and electricity.

The U.K. government’s decision to slash its level of energy bill support for businesses has been labelled “out-of-touch” by the Chair of the Federation of Small Businesses, Martin McTague.

However, other industry leaders and business owners have been more favourable in their reaction – but with caveats.

“The decision to all but eliminate help through the Energy Bill Relief Scheme (EBRS) is a huge disappointment for small businesses,” said McTague.

“For those struggling, the discount through the new version of the scheme is not material. Many small firms will not be able to survive on the pennies provided through the new version of the scheme.”

What does the support now look like?

From April onwards, help will drop from its current level of £18 billion to £5.5 billion, to limit taxpayers’ exposure to volatile energy markets, the government said.

Businesses, charities and other non-domestic energy users will receive a discount on high energy bills until 31st March 2024.

For eligible non-domestic customers who have a contract with an energy supplier, the new scheme will mean that they will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.

The discount will be applied from 1st April to 31st March 2024.

The Treasury explained that this will be subject to a wholesale price threshold of £107/MWh for gas and £302/MWh for electricity, meaning that businesses facing energy costs below this level will not receive support.

Eligible energy-intensive industries will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.

The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.

The government said this discount will only apply to 70% of energy volumes and will be subject to a “maximum discount” of £40/MWh for gas and £89.1/MWh for electricity.

Chancellor Jeremy Hunt said “Wholesale energy prices are falling and have now gone back to levels just before Putin’s invasion of Ukraine. But to provide reassurance against the risk of prices rising again we are launching the new Energy Bills Discount Scheme, giving businesses the certainty they need to plan ahead.”

“All help is very welcome”

Food and Drink Federation Chief Executive Karen Betts told foodmanifacture.co.uk that it was a step in the right direction.

“Manufacturers are under a great deal of pressure as they try to keep their heads above water while absorbing very high and volatile energy costs in order to keep the cost of everyday food and drink as low as possible for shoppers,” she said.

“This support recognises the criticality of the food and drink supply chain and that our businesses use constant levels of energy year-round and it should help to slow record levels of food and drink inflation.”

Meanwhile, Adrian Hanrahan, managing director of Robinson Brothers, a chemicals producer in West Bromwich, said, “all help is very, very welcome.”

But he added: “We’re a small company, our energy is tripling this year which means that being a small company we have one pot of money.”

Greg Pilley, managing director of Stroud Brewery, says their energy bill will triple and feels the government have been too reactive in their handling of the business energy crisis.

“Overall increasing energy prices are affecting the cost of everything – our cleaning caustic chemicals have gone up threefold, our aluminium cans have gone up, malt has gone up by 20%. It’s not just our energy that’s gone up, all our supplies have correspondingly gone up, part of which is the cost of energy to them and so it’s a cumulative thing,” he pointed out.

“Prior to things going bad, our energy was about £33,000 a year – it is now looking like about £100,000 a year without any subsidy or support. With prices being held till March that kept things fairly in line with our former costs.

“They’re extending some support ’til the following March so that’s got to be welcomed but in a way, it’s a bit late because everybody’s already put their prices up and they’re not going to come down in a hurry.

“What we would have liked to have seen would have been an announcement much sooner before people had put their annual prices out. Electricity is not the only rising cost, it’s indicative of everything else that’s going up.”

Hunt warns business leaders that energy support is “unsustainably expensive”

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Chancellor of the Exchequer Jeremy Hunt is due to announce the result of a review into business energy support in the House of Commons when parliament returns next week from its Christmas break.

Business leaders were forewarned on Wednesday that it will be bad news with Hunt saying that the current level of energy support is “unsustainably expensive” and that the current £18bn scheme was always limited to six months.

The Government’s energy bill relief scheme was launched on 1 October and will run until 20 March.

It covers all “non-domestic” contracts, including businesses, charities, and public sector organisations like schools.

Initially, the Government’s support package for business was set to involve ending support to all firms from April, shifting instead to targeted aid.

Schools and colleges to get £500m energy efficiency boost

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Schools and colleges in England will be allocated a share of £500 million to spend on energy efficiency upgrades, helping to save on bills during the winter months and manage energy consumption.

This will help them save money and make them more energy efficient during the cold period and increase winter resilience for future years, according to the government.

Estimations show that on average, a primary school will receive approximately £16,000, a secondary school will get £42,000 and a further education college group will benefit from £290,000.  Improvements could include installing better heating controls, insulation to reduce heat loss from pipes or switching to energy-efficient lighting.

This builds on the Government’s Energy Relief Scheme which is supporting schools and colleges this winter and will run until the spring.

On top of this, as announced in the Autumn Statement, the Government is investing an extra £2 billion in funding for schools next year and the year after.

This £2 billion of new money will be allocated between mainstream schools and high-needs funding. Local councils will get an extra £400 million for high-needs budgets, to help support children with special educational needs or disabilities. Academies, maintained mainstream schools and special schools will all be guaranteed a funding boost, which will arrive in April next year.

This means average funding per pupil for mainstream schools will increase by approximately five per cent overall, in the next financial year compared to 2022-23.

A typical primary school with 200 pupils will get approximately £28,000, and secondary schools with around 900 pupils will receive approximately £170,000. In total schools will be receiving £58.8 billion in 2024-25 – meaning in real terms we are putting more into schools than ever before.

Education Secretary Gillian Keegan said:

Russia’s illegal war in Ukraine is driving up energy prices worldwide, so it is important to look at the things we can do to make classrooms more energy efficient and resilient to price fluctuations.

We’re putting this cash in the hands of school and college leaders quickly, so they can decide what work is needed and so that our brilliant teachers can focus on teaching in a warm and safe environment.

Education is rightly a top priority for this Government and we will continue to strive to provide every child with a world-class education.

New guidance has also been published to support schools to maximise energy efficiency, reduce carbon emissions and improve sustainability and resilience this winter and beyond.

This funding comes on top of £1.8 billion of capital funding already committed this year for improving the condition of school buildings. The Public Sector Decarbonisation Scheme is also investing over £1.4 billion in public sector buildings, including schools over the next three financial years.

Business energy: How to manage multiple sites

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High business energy using warehouse

Running a business across several sites can be complicated and cost you more than it needs to if a properly coordinated energy management programme is not in place.

Over time, extensions may be added to existing properties or new sites may be bought as your company grows.

If this scenario is not properly managed, and not all companies have the necessary in-house expertise or time to do this, you could end up with a disparate energy contract portfolio with different renewal dates for your gas and electricity and find yourself dealing with multiple suppliers.

A lack of joined-up thinking in procurement, cost management and consumption makes it difficult to pinpoint areas where energy, and therefore money, can be saved.

Looking specifically at business energy procurement, aligning energy contracts into one brings clarity and has several advantages:

  • An identical start and end date to an energy contract allows for smoother negotiations at renewal time
  • Buying larger volumes from one supplier should help secure a better price for your power
  • Uniformity of billing makes it easier to spot errors contained within invoices. Big savings can be made through our Invoice Validation service.

Accurate reporting of energy data is also essential, which is where energy management portals such as EM-Powered are invaluable for target setting, energy auditing and other key objectives in reducing consumption.

Speak to one of our procurement team to find out how we can help secure the best deal for you regardless of how many sites or meter points you have.

Energy Bill Relief Scheme extended

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The government has expanded the Energy Bill Relief Scheme (EBRS) by four months so that relief can be claimed on all fixed contracts signed on or after 1st December 2021. Previously this was only applicable to contracts signed from 1st April 2022.

The expansion of the EBRS means that non-household customers who signed contracts at the end of last year or in Q1 of this year are now covered.

We are currently in the process of clarifying some of the details of what this means for flex contracts and other aspects such as green levies and will update you accordingly as the situation evolves. 

Government outlines plans to help businesses tackle energy crisis

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Westminster Palace using energy to light up at night

On Wednesday 21 September, the U.K government’s Business Secretary, Jacob Rees-Mogg, unveiled plans to help businesses negotiate their way through the energy crisis.

The Hospitality Sector, one of the industries most under threat from rising energy prices, has welcomed the government’s new Energy Bill Relief Scheme.

Through the scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.

It will apply to fixed contracts agreed on or after 1 April 2022 and to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.

To administer support, 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 – which is a discounted price per unit of gas and electricity. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

Without such intervention, there was real concern that many pubs, restaurants and hotels would be forced into liquidation as energy bills were anticipated to rise by as much as 500% from October.

Kate Nicholls, CEO of UKHospitality said: “This intervention is unprecedented and it is extremely welcome that the government has listened to hospitality businesses facing an uncertain winter. We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.

“The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government, to ensure that there is no cliff edge when these measures fall away.”

The level of price reduction for each business will vary depending on their contract type and circumstances, set out below:

  • Non-domestic customers on existing fixed-price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis
  • Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme. The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases. This is why the government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the government’s Energy Bill Relief Scheme support
  • For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount

A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.

If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.

The government will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.

If you need clarification on what these changes mean for you, Energy Management energy consultants and your dedicated Energy Management Account Manager will only be too happy to help.

Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.

“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

Read what Zenergi’s Head of Energy, Tim Partridge, has to say here >>

Government business energy support

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As businesses have not benefitted from an energy price cap and are not always able to fix their business energy price through fixed energy deals, many – particularly those in the under-pressure hospitality sector – are reporting projected increases in what they pay for their gas and electricity of around 500% if not more.

On becoming the United Kingdom’s Prime Minister, Liz Truss announced a new six-month scheme for businesses and other non-domestic users (e.g charities and public sector organisations) that will offer equivalent support as being provided for domestic consumers in a bid to protect them from soaring energy costs.

After the initial six-month scheme, the Government says it will provide ongoing, focused support for vulnerable industries, with a review in three months’ time to consider where this support would be best targeted.

The Government has promised to provide energy suppliers with the difference between this new lower price, and what they would charge business energy customers if this were not in place. Schemes previously funded by green levies will also continue to be funded by the Government during this two-year period.

Businesses are waiting for further details with bated breath and, sadly for some, any assistance may come too late.

“The Government says they are going to do for business customers what they do for domestic users but PWC (PricewaterhouseCoopers) are currently with the Treasury to see how they can do that because it is a different marketplace,” said an Energy Management spokesman.

For immediate assistance with business energy procurement please call us on 01225 867722  and speak to one of our energy consultants.

How to become more energy efficient as a business

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With prices already at record levels and set to climb even further in the months ahead, businesses need to do all they possibly can to mitigate against rising energy costs.

While companies are powerless to stop the upward trajectory, drafting and then implementing an energy efficiency strategy is one way they can help tackle the crisis.

Wastefulness is not something most companies can afford in the present climate so targeting a reduction in energy consumption should be high up the business agenda.

To able to reduce consumption, first businesses need to understand when and where they are using energy.

Energy Management has bespoke software that enables us to assess the energy performance of a business across its asset base.

Clients of Energy Management can also benefit from the use of our energy management portal, EM-Powered, which has a wide range of features that enable on-site energy managers and facilities managers to keep track of costs.

Once the data has been gathered and analysed, informed decisions can then be made about where savings can be made.

This may result in equipment upgrades or relatively low-scale investment in timer switches for lights or the installation of longer-lasting LED lightbulbs.

Encouraging behavioural change amongst employees is key to the success of an energy efficiency strategy.

Most money-conscious employees wouldn’t leave lights on unnecessarily or not properly shut down their electrical devices but gentle reminders from an appointed, in-house ‘energy champion’ never do any harm.

Alternatively, you could turn to an external energy agency to conduct an energy audit and determine how you can use less power without compromising business throughput, output or thermal comfort and wellbeing of staff.

Here’s a summary of the steps you can take:

  • Get an energy audit

Air leaks and issues around boilers and insulation will be identified along with any energy-saving opportunities.

  • Purchase energy-efficient equipment

Check the energy star rating of appliances and, where applicable, replace with more energy efficient models

  • Reduce peak demand

Try to stagger working hours to spread the load and bring energy consumption down during periods when it is typically at its highest.

  • Lighting

LED lightbulbs and timer switches that turn off the lights when not in use are simple measures that don’t have to break the budget

  • Heating

Check to see if the boiler that supplies heating to the building is serviced and well-maintained.

Install thermostats so that rooms are only being heated when they need to be.

  • Switch off idle devices

A great office energy-saving tip is to have your computer add-ons (printers, monitors, etc.) connected to power strips so that the flip of a single switch can shut down several devices at a time.

  • Office redesign

A simple redesign of the layout of your office may result in more natural sunlight entering the building and, therefore, reduce the need for artificial light. Greater exposure to natural sunlight is also known to improve the well-being of staff.

  • Home working

By offering employees the option of working from home, you are not only giving them flexibility in their work/life balance but also offset energy costs from the office.

  • Natural protection

Planting trees in strategic places around the outside of the building will provide shade from the sun and act as wind breaks during the winter months and can help reduce the demand for air conditioning and heating.

  • Cultural change

Appointing an ‘energy champion’ to advocate energy efficiency throughout an organisation and encourage their co-workers to adopt ‘cleaner’ practices in and outside of the workplace is one way of encouraging behavioural change.

Annie Robins wins customer service award

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Annie Robins has been presented with the “Delight our Customer” award and a bunch of flowers by Zenergi Group COO, Polly Halliday for her outstanding customer service.

The Delight our Customer award was awarded to Account Administration Manager Annie “in recognition of delivering on our purpose and most important promise. Every team and every role within the group all strive to delight those we serve but you have been selected as the best.”

Annie has been with Energy Management, now part of the Zenergi Group, since October 2017 having graduated from the company’s successful apprenticeship scheme, which is run in connection with Wiltshire College.

Annie said: “Now being part of a bigger company, it is lovely to be recognised for my hard work in the team.”

If you would like to join a company that truly cares about its team and its customers, a couple of job vacancies are currently available in Account Administration management, based in our Bradford-on-Avon offices.

Details of both positions and how to apply can be found here: https://careers.zenergi.co.uk/careers/

We’re hiring! Administration Manager and apprentice sought

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Working in partnership with Wiltshire College, Energy Management Ltd is currently offering an apprenticeship in Account Administration Management.

Tasks will be interesting and varied and previous apprentices have graduated to full-time employment within the company upon completion of their apprenticeship.

Applicants should have a minimum of 3 GCSEs at grades A*-C including Maths and English (or equivalent).

Energy Management is also recruiting an Account Administration Manager due to steady business growth.

This position is also based in Energy Management Ltd’s waterside offices in the delightful town of Bradford-on-Avon,

Details of both positions and how to apply can be found here: https://careers.zenergi.co.uk/careers/