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Factbox-Britain’s plans to shield businesses from soaring energy prices
Global Banking & Finance Review®
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LONDON (Reuters) – British businesses are facing a sharp rise in power bills driven by sky-rocketing gas prices, as war in Ukraine and European sanctions on Russia heighten concerns over the security of energy supplies.
Below are some of the government’s plans announced on Wednesday to help shield businesses from the rising costs:
PRICE CAP
The price of electricity will be capped at 211 pounds ($239.17) per megawatt hour (MWh) and for gas at 75 pounds per MWh. This will apply to contracts signed on April 1 and would last for six months from Oct. 1.
The government will compensate suppliers for the reduction in wholesale gas and electricity unit prices they are passing on to businesses.
ELIGIBILITY
The package will apply to non-domestic users like businesses, charities and public sector organisations, such as schools, hospitals and care homes.
The government said: “The scheme is intended to be of broad application but there may be very limited exclusions, for example businesses that use gas or electricity for the purpose of generating power they are selling back into the grid, such as power stations, pumped hydro or grid-level battery storage.”
NORTHERN IRELAND
The plan currently applies to England, Scotland, and Wales. But the government is planning a similar policy for Northern Ireland.
(Reporting by Andrew MacAskill; editing by William James)
A price cap is a regulatory measure that limits the maximum price that can be charged for a service or commodity, such as energy, to protect consumers and businesses from excessive costs.
Non-domestic users are entities such as businesses, charities, and public sector organizations that consume energy but do not use it for residential purposes.
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