Colleges with high energy bills will get discount under reduced scheme

New ‘Energy Bills Discount Scheme’ will run until March 31 next year

New ‘Energy Bills Discount Scheme’ will run until March 31 next year

10 Jan 2023, 9:43

Colleges will soon be able to tap into a new energy support scheme – but only those with the highest bills will get a discount after government slashed the level of financial help.

The current £18 billion energy bill relief scheme, which includes colleges and other education institutions, runs out in March.

But the new ‘Energy Bills Discount Scheme’ announced last night, which will run until March 31 next year, includes businesses, charities and the public sector.

The government confirmed that colleges are included, in a move likely to be welcomed by the sector amid significant wider cost pressures and soaring utility bills.

However, fewer colleges and education institutions are likely to be eligible, and those covered will receive much less support than under the existing bill relief scheme.

Under the new scheme, only those paying above £107 per megawatt hour for gas or £302/MWh for electricity will receive help, automatically applied to bills.

The previous scheme had significantly lower thresholds of £75 per unit of gas and £211 for electricity.

Geoff Barton, general secretary of the Association of School and College Leaders, called the announcement “welcome clarity after months of uncertainty” about whether schools and colleges would receive any help beyond March at all.

But he added: “While it is right that there is a discount for those with the highest bills, we are concerned that many schools and colleges may not be eligible for this.”

Wholesale prices now falling

The government noted wholesale prices had fallen significantly in recent months. The measures will still help some of those “locked into contracts signed before recent substantial falls…and provide others with reassurance against the risk of prices rises again”.

Price thresholds are around half of what colleges renewing in August faced when the market spiked, keeping their costs down.

But the government is also no longer guaranteeing it will cover all costs above its thresholds, potentially raising costs further for those on particularly expensive tariffs.

The unit discount will be capped at £6.97 per megawatt hour for gas, and £19.61/MWh will be applied to electricity bills. Support under the new scheme is capped at £5.5 billion.

The government said the lower level of support “strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets”.

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