Companies fear that the price of energy will rise after the support plan ends

The plan will go into effect Oct. 1 and last until March 31. (Lauren Hurley/PA) (PA File)

A group representing Scottish business has raised concerns about sharp rises in energy prices following the end of a new government plan.

UK Energy Secretary Jacob Rees-Mogg announced plans on Wednesday to slash the cost of wholesale gas and electricity for non-household customers for six months from October.

The government cap will mean the “supported wholesale price” will be £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas, around half the projected open market price and equivalent to the current scheme. for homes.

Companies that agreed to fixed-term contracts as of April 1 of this year will automatically see the wholesale part of their invoice limited.

A review will take place in three months looking at the support that will be available after March, which the government says will focus on “the most vulnerable non-household customers and how the government will continue to help them with energy costs.”

Scottish Chamber of Commerce chief executive Liz Cameron welcomed the scheme but raised concerns energy prices could rise after March and put businesses at risk, as well as asking for clarity on who you will be able to access support after the deadline.

She said: “For those companies that will benefit, the six-month cap is not long enough for them to be sufficiently reassured that the problem will not return when the cap is no longer in place.

“We are concerned that businesses are in for even more sudden spikes in energy bills once the cap is lifted.

“We urge the UK government to immediately engage with the business community to properly define the ‘vulnerable industries’ cited for support after the original six-month limit.”

The Scottish Night Industries Association, which represents pubs, bars and nightclubs, welcomed the plan but warned that it is unlikely to save businesses that have incurred high levels of energy debt in recent months. to say that companies that renewed their contracts before April 1 this year will continue to struggle with “unsustainable” energy costs.

The agency also expressed concern that other costs outside the wholesale price, such as network charges or operating costs, could increase and affect companies, which, according to the spokeswoman, “is clearly not sustainable.”

Meanwhile, Scottish Secretary Alister Jack said the scheme “will provide much-needed certainty to Scottish businesses, schools, hospitals and other public services and comes as a matter of urgency as we head into winter”.

He added: “This comes on top of the Prime Minister’s monumental intervention for domestic customers, saving the average household £1,000 per year on fuel bills, and on top of the £37bn support package announced earlier this year.

“The UK government is also taking vital steps to strengthen our energy security.

“The UK Treasury was able to provide support to people across the country as we faced Covid and its strength is proving vital again as we continue to tackle the rising cost of living.”

Scottish Conservative finance spokeswoman Liz Smith said the announcement provides a necessary “leave-level intervention”.

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