The UK Government has expanded its energy subsidy program for businesses to cover contracts signed as far back as December last year.
The multibillion-pound package, designed to cap wholesale costs, originally applied to fixed contracts signed by companies and charities since April 1 this year. That’s now been extended backward to Dec. 1 2021, according to a Monday update of the Department for Business, Energy and Industrial Strategy’s website.
The expansion of the Energy Bill Relief Scheme will help firms that signed at sky-high rates when wholesale prices jumped following Russia’s invasion of Ukraine in February. The Federation of Small Businesses said it was “an extremely welcome move.”
The government is ensuring that help “covers all recent energy price increases, and will help those businesses who have seen increased bills for a sustained period,” the Department for Business, Energy and Industrial Strategy said in an emailed statement.
The support package will pay for a portion of businesses’ energy costs for six months from October, with the government considering an extension into the future for sectors deemed to be particularly vulnerable. There’s also support available for firms on variable or out-of-contract rates, subject to a maximum subsidy.
The total cost of the energy package, including household support, was forecast to be £60 billion ($66.5 billion) in the six months from October, Chancellor Kwasi Kwarteng said on Sept. 23.
The subsidies aim to bring wholesale costs for businesses down to a level of 21.1 pence per kilowatt-hour for electricity and 7.5 pence for gas. Still, those prices are many times the levels available on the market before the energy crisis hit.
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