The government has unveiled new much-needed support for farming and rural businesses facing surging energy bills this winter.
Through a new Energy Bill Relief Scheme announced today, the government will provide a discount on wholesale gas and electricity prices for all UK businesses.
It means bills will be cut by around half their expected level this winter, with support applying to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.
The support will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6 month period for all non-domestic energy users.
Savings will be first seen in October bills, which are typically received in November, the government said on Wednesday (21 September).
It added that customers do not need to take action or apply to the scheme to access the support, as it will automatically be applied to bills.
To administer support, a Supported Wholesale Price has been set – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity.
This is equivalent to the wholesale element of the Energy Price Guarantee for households, and includes the removal of green levies paid by non-domestic customers who receive support under the scheme.
Announcing the scheme, Prime Minister Liz Truss said there were 'huge pressures' on UK businesses due to surging energy bills.
"As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind," she added.
"At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all."
NFU President Minette Batters said the energy relief scheme would provide a 'much-needed cushion' for farming businesses.
Given the package does not cover limits on standing charges, she said it was essential that the government continued to assess the full impact that energy bills would have on business confidence and production.
“We also need urgent clarity on what support will be available for food businesses after the initial six month period," Mrs Batters added.
"Energy plays a core role in the production of our food and throughout the food supply chain, from fertiliser production and heating glasshouses and livestock buildings, to baking bread and keeping facilities clean.
"We simply can’t produce the food the nation needs without affordable energy."
The Food and Drink Federation (FDF) said it 'welcomed' the Energy Bill Relief Scheme and the speed with which it’s being rolled out.
"It addresses the largest and most volatile cost pressure facing our industry right now," explained the body's CEO, Karen Betters.
"Although some aspects of the scheme are still to be clarified, it offers relief to food and drink manufacturers across the UK."
The announcement follows the launch of the Energy Price Guarantee for households, under which a typical household will pay on average £2,500 a year on their energy bill for the next two years.