The government is to cap energy prices for businesses in line with the two-year domestic cap, now called an ‘Energy Price Guarantee’, announced on 8 September, although for businesses it will only last for six months.
The new energy price cap for consumers kicks in from 1 October, restricting energy charges to an average of £2,500 a year for the next two years. This is automatic, applies to all households and is in addition to the £400 energy bills discount for households.
As businesses have not previously benefited from an energy price cap and are not always able to secure their energy price through fixed deals, many are reporting projected increases in costs of gas and electricity of more than 500%.
That is addressed by the new six-month scheme for businesses and other non-domestic energy users (including charities and public sector organisations like schools).
This is intended to protect businesses from the soaring energy costs and provide them with some certainty for planning.
After the initial six-month scheme, the Government promises on-going, focused support for vulnerable industries.
Government borrowing in the region of £100billion-£150billion will be used pay energy suppliers, many of which are earning record profits thanks to the high prices, the difference between the cap and what they would charge their customers were it not in place.
Schemes previously funded by green levies, which are suspended during the scheme, will also be funded by government borrowing during the two-year period.
At the same time the government will seek to secure new sources of energy supply, including allowing onshore fracking, which some fear causes earthquakes, more gas and oil exploration in the North Sea, and more nuclear and renewable energy generation.
The government has set a target for the UK to become a net energy exporter once again by 2040.
A review is to be held into how the UK can become a Net Zero CO2e contributor to the atmosphere by 2050, a target enshrined in law, in an economically-efficient way without placing undue burdens on businesses or consumers.
The review will be chaired by Chris Skidmore MP and is required to report by the end of this year.