In September 2022 the UK Government announced a support package for business consumers of energy, which included the public sector, called The Energy Bill Relief Scheme (EBRS). This package was designed to shield consumers from exceptionally high wholesale commodity prices on consumption billed between 1 October 2022 and 31 March 2023.
The scheme was passed into law on 1 November, resulting in UK industrial and commercial users, who were paying energy costs above a threshold rate, receiving discounts over winter 2022.
What impact did the scheme have on wholesale rates?
The threshold rates were £211/MWh (21.1p/KWh) for electricity and 220p/therm (7.5p/KWh) for gas, for the wholesale commodity element of bills only, which excludes standing charges and non-energy costs such as charges for use of the distribution and transmission networks, green levies for example.
If a customer’s wholesale price was above the threshold, they received a discount to bring them back down to that level – subject to a maximum discount of 34.5p/KWh for electricity and 9.1p/KWh for gas. For example, if a customer’s wholesale electricity price were 30p/KWh, they would have received a discount of 8.9p/KWh.
How were CCS involved in the creation of the relief scheme?
We were involved in the consultation stages, providing our market and commercial expertise to inform the policy, its implementation and the accompanying guidance. Once the scheme details had been finalised, we assessed the impact it would have on our customer base.
We had 5 trading strategies delivering energy over winter ‘22. The average price achieved by the CCS energy team for those strategies was significantly below the EBRS support threshold. One of our best performing strategies delivered prices more than 70% below the EBRS threshold.
However, this meant that our customers in 4 of the 5 strategies did not receive any government support, as they were already paying less than the thresholds. The one exception was our short-term strategy delivering from October ‘22, which was bought over summer ‘22 when gas and electricity prices were already high. Customers in this basket were eligible for discounts under the EBRS scheme. Our energy team worked closely with our framework suppliers to ensure the rebates were automatically included in their bills.
CCS buys energy for approximately 50% of the public sector, with customers including health, education, local authorities, central government, charities and more. Energy is bought by our in-house Trading team, who monitor the wholesale markets and execute trades. They are overseen by a full-time risk team, who set the rules and limits for energy trading to ensure customers are as protected as possible from volatile market conditions.
Our strategies are based on aggregation, using the power of bulk buying to deliver maximum savings using HM Treasury approved policies.
How much did CCS customers save?
In total, our customers paid an estimated £627 million less than they would have done had they been billed at the EBRS support prices. That’s just for the winter ‘22 period; in reality, the benefit to our customers has been far higher, as energy prices had already increased in the summer following Russia’s invasion of Ukraine.
John Malone, Deputy Director Buildings said:
These are enormous savings for the public sector and the public purse in what’s been an exceptionally challenging and volatile energy market. The Energy team are extremely proud of the outcomes we have achieved both for our customers and by extension, the UK taxpayer.
Find out what you could save
To find out more visit our energy overview page, or get in touch using our online form quoting ‘energy bill reduction’ or call us on 0345 410 2222.
