Government Announces Business Energy Price Cap

energy cap

UK businesses, charities and public sector have been given an emergency package of government support via a new Energy Bill Relief Scheme including a cap to significantly reduce the price paid for energy from 1 October to help them get through the winter. The UK government will discount wholesale power prices for six months to protect them from soaring bills. Further help will be offered to companies in vulnerable industries after that.

The cap means electricity prices for business customers will still be about double what they were in October 2021 when the price per megawatt hour was £117, but more than half of this year’s forecasted winter prices of about £540. The scheme limits the price suppliers can charge customers for units of gas and electricity. Businesses will not need to take any action, discounts will be automatically applied to their bills. Changes will apply to new contracts from 1 October, and to fixed contracts taken out since 1 April.

Today’s announcement follows the launch of the Energy Price Guarantee for households in Great Britain, under which a typical household will pay on average £2,500 a year on their energy bill for the next two years from 1 October. The scheme limits the price suppliers can charge customers for units of gas and electricity. Pubs can expect to have bills reduced by over 40% for example under this scheme.


• Businesses in Wales (and England/Scotland), prices will be capped at 21.1p/kWh for electricity and 7.5p/kWh for gas

• This compares with wholesale estimates this winter of 60p/kWh for electricity and 18p/kWh for gas

• The support package will apply to fixed-price contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts

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