Liz Truss announced an energy support package for households and businesses on 8 September 2022, according to the National Insulation Association1. The centrepiece is a new Energy Price Guarantee, which the NIA reports will limit the price suppliers can charge customers per unit of gas, with the Energy Price Cap set at £2,500 annually for the average home1.
The NIA states this saves households £1,000 annually and comes in addition to the £400 previously promised1. The package applies to Great Britain, and Northern Ireland will experience the same level of support1. Households on heat networks, park homes and heating oil will have a separate fund1. The package is live from October and is expected to reduce inflation by 5%, which the NIA says cuts the current rate of inflation in half1.
For businesses, charities and public sector organisations, energy costs will be capped for six months at the same price per unit that households pay, with a review in three months to see if vulnerable sectors should be targeted1. Truss called for businesses to focus on energy efficiency to reduce bills further1. There will be no further windfall tax, and Kwasi Kwarteng is to release the expected costs later in September; cost projections are uncertain but expected to be in the range of £100 billion to £150 billion1.
On supply, the package includes a new Energy Supply Taskforce, long-term contracts with gas suppliers, a new licensing round for North Sea oil and gas, and increased deployment of hydrogen, solar, carbon capture, usage and storage and wind, with nuclear entering the Contracts for Difference scheme1. The ban on fracking is removed, and the government will pursue fracking where there is local support1. The stated aim is for the UK to be a net energy exporter by 2040, achieved through expansion of nuclear, fracking and renewable generation, with a business security plan to be set out within two months1. An energy regulation review and a review of net zero were also promised1.
"BEIS has confirmed that the Energy Company Obligation and the Social Housing Decarbonisation Fund Wave 2.1 will continue to operate as per the regulations and the operation of these schemes, and is not directly affected by today's announcement."
| Measure | Detail |
|---|---|
| Energy Price Guarantee | £2,500 annually for the average home, saving £1,000 a year |
| £400 payment | In addition to the guarantee |
| Off-grid households | Separate fund for heat networks, park homes and heating oil |
| Business cap | Six months, at the same unit price as households |
| Green levy | Frozen on energy bills for two years |
| Fracking ban | Removed; pursued where there is local support |
| Net energy exporter | Target by 2040 |
Why it matters for households
The guarantee changes how a household bill is calculated: rather than a headline cap on the total, it limits the unit price suppliers can charge for gas, so what a home pays still depends on how much energy it uses1. A household using more than the average will pay more than £2,500, and one using less will pay less. The £400 already promised sits alongside the guarantee rather than replacing it1. For homes off the gas grid, including those on heating oil, park homes and heat networks, the support comes through a separate fund whose detail is not set out in the announcement1. The freezing of the green levy for two years removes a component from bills, while the removal of the fracking ban and the 2040 export target set the direction of supply policy that will shape energy independence over the longer term1. The Energy Company Obligation and the Social Housing Decarbonisation Fund Wave 2.1 continue unchanged, so insulation and retrofit support under those schemes is not affected1.
What happens next
The package goes live in October1. The business cost cap will be reviewed after three months to consider targeting vulnerable sectors1. Kwasi Kwarteng will release the expected costs of the package later in September1. A business security plan is to be set out within two months1.