This week’s announcement of government support for businesses facing rising energy bills means that fleets looking to go electric can plan ahead with confidence, according to smart charging firm Ohme. 

The Energy Bill Relief Scheme provides a price cap on wholesale electricity prices for business customers, similar to the Energy Price Guarantee for households but not a discount on the full-use rate

Unveiled by Business Secretary Jacob Rees-Mogg, the Energy Bill Relief Scheme provides a price cap on wholesale electricity prices for business customers, similar to the Energy Price Guarantee for households but not a discount on the full-use rate.

Following the announcement, Ohme has said that now is a perfect time for companies to look to electrify their fleets and reduce costs.

Already this year, sales of fully electric vans are up more than 50%, while registrations of fully electric cars are up over 48% on 2021.

And fleets going electric can make use of Ohme’s fleet-specific software portal and the ability of its Home Pro smart charger to automatically adjust its charging for drivers and companies to take advantage of all the times of low-price charging with smart off-peak tariffs.

“More and more businesses are making the move towards electric and with Ohme’s smart chargers they can continue to reduce their running costs still further,” said Ohme CEO, David Watson. “Ohme also offers drivers the option to charge their car when renewable energy generation on the grid is at its highest, further lowering their company’s CO2 impact and helping them to meet sustainability targets.”

The Government’s Energy Bill Relief Scheme will provide a discount for businesses and other non-domestic customers on their gas and electricity unit prices against the wholesale element of the supply. Under the plan, energy suppliers will incorporate a capped wholesale price of 21.1p per kilowatt-hour for electricity and 7.5p/kWh for gas when calculating rates for corporate customers. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The Government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that they are passing onto non-domestic customers.

However, it’s worth noting that the absolute level of individual bills will continue to vary across different contracts and tariffs – and Resolve Energy has pointed out that according to Ofgem’s latest data from August 2021, the wholesale cost element of a bill is just 29% of an electricity unit rate and 41% of a gas bill.

The discount will apply to fixed contracts agreed on or after 1 April 2022 and will be levied on energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November. The scheme will also provide support for deemed, variable and flexible tariffs and contracts.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.

The new scheme has also been welcomed by the automotive and logistics sectors, although they’ve called for a longer-term fix.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “The new Business Secretary has given thousands of automotive companies vital breathing space, helping keep their operations viable this winter. This is a short-term fix, however, and to avoid a cliff-edge in six months’ time, it must be backed by a full package of measures that will sustain the sector.

“Manufacturers have consistently invested to drive down energy use, but it remains one of their biggest costs, threatening competitiveness and viability. Government must now seize this opportunity to deliver a long-term, affordable and secure supply of low carbon energy to ensure the industry is globally competitive and can deliver the jobs, economic growth and net zero gains the UK needs.”

Trade association Logistics UK also welcomed the support but called for longer-term action. It said that rising energy prices were a great concern to businesses across the logistics industry, which is already operating on low profit margins.

Kate Jennings, director of policy, continued: “Figures from the latest edition of Logistics UK’s Manager’s Guide to Distribution Costs show that total vehicle operating costs have increased by 16.7% in the six months to 1 July 2022, as fuel, insurance premiums, business overheads and maintenance costs – such as tyres – have all increased.

“With operators also facing further costs as they look to decarbonise their fleets – and with many road operators transitioning to electric vehicles – Logistics UK is keen to work with government to explore what further support will be needed beyond the six-month period.”