Business energy support package: more details

A quick update on the Government’s Energy Bill Relief Scheme for businesses - more detail is now emerging from energy suppliers and we’re pleased to see that it fits our assumptions so far:

Impact on flexible tariffs

For those on flexible tariffs, the discount will be applied to the final wholesale energy price for the month. All fixing and un-fixing of costs will be blended as usual - regardless of when the trades were placed - then the discount will be applied. We presume this means before the supplier’s margin.

Impact on flex contracts with a shape fee

If your flexible energy contract includes a shape fee - commonly seen with flex electricity contracts as a means to simplify trading and billing - your discount will be applied to the commodity only before the shape fee is applied.

Manipulation of support

…isn’t allowed! Basically, it’s likely that the final legislation will include anti-abuse clauses to prevent consumers from profiting from the scheme. So if you’re buying gas for a CHP, run the engine as you would have without your gas cost being supported.

Still some questions

The question at the forefront of our minds is whether the gas used by CHPs that export some of the electricity they generate to the grid will receive a discount. It might be logical to think that the gas used could be split into:

• Heat & electricity used on site which would receive the discount

• Electricity exported to the grid which would not

Whether government have the appetite to drill this deep into the data remains to be seen.