FWD: New energy support ‘does not offer much’

The Federation of Wholesale Distributors has responded to the government’s new Energy Bills Discount Scheme, stating that it ‘does not offer much help to any businesses’

The new Energy Bills Discount Scheme for UK businesses, charities, and the public sector will come into effect when the current scheme ends on 31 March and provide a discount on high energy costs until 31 March 2024.

From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.

This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.

James Bielby, Chief Executive, FWD, responded:

“This level of support does not offer much help to any businesses, especially those who are vulnerable due to high energy bills. The wholesale energy price will probably fall below the 30.2p per kwh threshold due to market forces, and therefore few businesses will get help, except those who signed fixed contracts at way above that level in 2022. However, the discount is so small it won’t make a huge amount of difference, and they will still be paying much higher energy bills than this time last year.

“The government has also taken the easier option in giving blanket support, rather than taking into account the vital nature of food distribution, and the unavoidably high energy consumption that it involves, and supporting it accordingly. Food and drink supply to households and public services will be disproportionately affected by rising costs, so we will continue to work with government to make the case for bespoke support for wholesalers.

“If we are looking for positives, there is now extra incentive for wholesalers to look for ways to be more energy efficient.”

Association of Convenience Stores CEO James Lowman agrees: “The new package of business support is woefully inadequate. By moving to a subsidy on energy bills and failing to target specific sectors or those worst affected, the government has spread £5.5bn support over every type of business, the result being a level of subsidy that is ultimately pointless.”

Association of Convenience Stores Energy Bills Discount Scheme FWD Government James Bielby James Lowman