2 Tackling energy prices 2.1 The government has announced a significant package of support to reduce the pressure 1 from rising energy prices on households and businesses across the UK. 2.2 To provide immediate support for households, an Energy Price Guarantee (EPG) will cap the unit price that consumers pay for electricity and gas. This will mean the average household will pay no more than £2,500 per year for a period of two years from October 2022, and is expected to save at least £1,000 a year, although savings for individual households will vary according to their energy use. The government will deliver £150 of the saving by covering the environmental and social costs, including green levies, currently included in domestic energy bills for two years. 2.3 This will be in addition to the £400 support all households will receive from the Energy Bills Support Scheme (EBSS) over the coming winter. 2.4 Together, the EPG and EBSS will save the typical household at least £1,400 for the next year compared to the October 2022 Price Cap. 2.5 The government will also provide an additional payment of £100 to compensate for the rising costs of alternative heating fuels for UK households not able to receive support for heating costs through the Energy Price Guarantee, for example if they are living in an area of the UK that is not served by the gas grid. 2.6 The Energy Bill Relief Scheme (EBRS) is a temporary six-month scheme in Great Britain that will protect businesses and other non-domestic energy users, including charities and public sector organisations, from rising energy bills this winter by providing a discount on wholesale gas and electricity prices. The government will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023, focusing in particular on identifying the most vulnerable non-domestic customers and how to continue assisting them with energy costs. A parallel scheme based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland. 2.7 These temporary interventions will be funded by the government to support households and businesses with the cost-of-living challenge in the short term. To address the longer-term problem of rising energy costs, the government will be making significant interventions in the energy market over the coming months. 2.8 A new Energy Supply Taskforce will seek to negotiate long-term agreements with major gas producers. The government is also working with electricity generators to reform the outdated market structure where gas sets the price for all electricity – instead, the government will move to a system where electricity prices better reflect the UK’s home-grown, cheaper and low-carbon energy sources, which will bring down consumer bills. Successful action should smooth the price of wholesale gas and electricity and increase security of supply over time, reducing the likelihood of similar energy price crises in the future. 1 Energy Price Guarantee Press Release, September 2022 The Growth Plan 2022 13