Qwikify is pleased to announce that the latest scheme from the government, called the 'Energy Relief Scheme (EBRS)', is set to tackle rising energy costs for non-domestic users including those who operate residential care homes.
Providers will effectively be shielded from the rising energy tariffs for a minimum of six months starting from October 1, 2022 and ending in March 2023.
Qwikify is on hand to point you in the right direction with the new scheme with a summary of how it will work below.
Energy bills account for a significant share of care provider's operational costs with a recent analysis confirming that the average cost of energy per resident's bed (surveyed across 55,000 beds) was in the region of £750 in May 2021 increasing to £3,950 in July 2022 and an astonishing £5,166 in August.
As residential care providers, we understand more than most just how scary and utterly unsustainable the above figures are and therefore appreciate the importance of the scheme.
Energy Relief Bill Summary
1. The government is aiming to cap the amount that energy suppliers can charge non-domestic customers for the 'wholesale' portion of energy unit prices. This will equate to roughly 70% of the total costs charged to customers per kWh.
2. Supplier charges can be added to the new rates, allowing for competition in the market and more variation in the final delivered unit rate than household energy.
3. Price Guarantee provided Standing charges are not included in the government cap currently and these will continue to be set by the suppliers to account for distribution, and network maintenance.
4. The government-supported price has been set at: - £211 per megawatt-hour (MWh) for electricity - £75 per MWh for gas.
For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
- £600 per MWh for electricity - £180 per MWh for gas
5. This approach results in a wholesale energy cap for businesses (known as the Supported Price) which limits the maximum wholesale costs to about 21.1p kWh for electricity and 7.5p kWh for gas – less than half the wholesale price anticipated for this winter.
6. To ensure consistency between the domestic and non-domestic schemes, the government-supported price is based on the implied wholesale element of the Energy Price Guarantee for domestic customers. It will not be the same as the final per unit price paid by non-domestic customers, which will also reflect other costs such as network charges and operating costs, plus the impact of competition between suppliers.
7. Your energy suppliers will provide a discount on your gas and electricity unit prices, however calculating this is complicated and open to exploitation by suppliers. It’s extremely important that businesses have the support to calculate their expected discounts and hold suppliers to their obligations.
Eligibility
The scheme will be available to everyone on a non-domestic contract including:
- Private businesses - Public sector organisations such as care homes, schools and hospitals - Voluntary sector organisations, such as charities who are:
- On existing fixed-price contracts that were agreed on or after 1st April 2022 - Signing new fixed-price contracts - On deemed / out-of-contract or variable tariffs - On flexible purchase or similar contracts.
The amount of your bills will be reduced
The government will provide a discount on your gas and electricity unit prices. Unfortunately, it’s not at all straightforward to calculate the discounts, and the government has done an awful job of providing clear and comprehensive guidance for customers to work out their discount entitlement.
To calculate your discount, the estimated wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter.
For all non-domestic energy users in Great Britain, this government-supported price has been set at:
- £211 per megawatt-hour (MWh) for electricity - £75 per MWh for gas
For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
- £600 per MWh for electricity - £180 per MWh for gas
To find out more about how the scheme will work and how it could benefit your residential care home, you can visit the.GOV site here.
Read our previous post to learn about the challenges of adopting digital technology in social care.