The newly appointed Prime Minister of the British government, Liz Truss, builds on the solutions to the energy crisis of her predecessors. Following the announcement of price caps for households, companies will also see their caps on maximum prices for electricity and gas.
Ceilings on energy
The price caps on energy for companies are to apply to contracts signed since April 1 this year and are negotiated for at least six months, Bloomberg reported, citing well-informed sources.
The price cap is to be set at 21.1 pence per kilowatt hour for electricity and 7.52 pence per kilowatt hour for gas. The government will have to spend around £40 billion to compensate for the price difference. However, the specific amount will still be subject to negotiations on the state budget adjustments. That’s scheduled for this Friday.
When will electricity prices be reduced?
Compared to current market prices, the price caps should reduce the price of electricity for companies by 50 percent, while the discount for gas would be around 25 percent. In addition to companies, the price cap will also apply to public sector institutions or charities. After three months, the price caps are to be evaluated and the government will decide whether to extend them.