The UK Government has today, 1st October 2022, provided updated guidance on the Energy Bill Relief Scheme to confirm the Maximum Discount levels of support available for business. The update impacts companies on flexible purchasing, variable and deemed/default products. 

The news will not be welcomed by UK business as support has been significantly reduced.

Maximum Discount levels are confirmed as below;

• £345 MWh or 34.5 p/kWh for electricity (15% reduction of £60 MWh from initial guidance of £405 MWh)
• £91 MWh or 9.1 p/kWh for gas (21% reduction of £24 MWh from initial guidance of £115 MWh)

Flexible contracts

The biggest impact will undoubtedly be on flexible purchasing customers who, in line with the initial Maximum Discount guidance from Government, have pro-actively looked to manage the risk to their business by closing out positions this winter.

As per the initial Government guidance, electricity wholesale trades below £616 MWh and gas trades below £190 MWh would have allowed businesses to be billed the Supported Price this winter.  Now, only trades below £556 MWh and £166 MWh ensure that is possible.

For a 10 GWh consumer this could increase a winter power bill by circa £300k and a gas bill by circa £120k.

What will frustrate many in the industry is that the confirmation comes after businesses have been required to commit to a purchasing strategy ahead of the closure of the Win-22 contract. Many will have used the initial Government guidance to base decisions and will now be unable to capitalise on alternative strategies to save.

An initial summary of the Energy Bill Relief Scheme can be found here and has now been updated to reflect the confirmed Maximum Discount rates.

Adalta Energy understands that this continues to be 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.