The government has unveiled a major energy assistance scheme to help businesses cut skyrocketing energy bills.
What is it, how does it work, who is eligible, how much can businesses get, and how quickly can they get it?
what is the scheme?
The Temporary Business Energy Support Scheme (TBESS) is a €1.25 billion financial assistance program for businesses facing rising energy costs. It will be managed by the Board of Revenue, which draws on its experience managing various Covid support schemes since 2020.
Who can apply?
Any company in the country can apply as long as it can show that the unit price of electricity or gas this year has increased by more than 50% compared to the same period last year.
“So if the unit price of electricity or gas has increased by more than 50 percent in the past year, you are eligible,” Tánaiste and Enterprises Minister Leo Varadkar explained at a press conference on Tuesday.
“It’s pretty much every business. A few businesses have long-term contracts with very low energy prices, but it’s not common.”
Mr Varadkar said “potentially the majority of Irish businesses” would apply for the scheme.
How much support can they get?
The scheme pays 40% of the cost of increased bills, capped at €10,000 per facility per month.
How soon will the scheme be operational?
The government expects to make its first payments to companies in November, with those payments backdated to September.
But this is conditional on enacting a law in October through Dáil and Seanad to put the revenue agency’s system up and running.
Another potential fly in the ointment is that state aid rules mean there is a cap on the amount of aid a government can provide to a single company, so the scheme would need approval from the European Union. It means that there is
Varadkar said TBESS was “mostly” allowed, but admitted that it still needs EU approval.
If this looks like an ambitious timetable, Varadkar said the first wage subsidy scheme to fund the pandemic operated on a similar timescale.
Ministers Damian English and Dara Calliary, who sat alongside him on Tuesday, said the benefit of the scheme was that its very existence would help businesses manage cash flow in anticipation of state aid coming. pointed out that it was
How long will the scheme run?
It will run “at least” until February 2023, but the insertion of the word “temporary” into its name is given that it was simply called the Business Energy Support Scheme within the government over the weekend. understand.
That said, Varadkar seemed open to extending it, pointing out that the future cannot be predicted.
“If energy prices have not fallen and we can afford to provide this level of support to the economy, I think it will be extended in that scenario,” he said. “If we need to extend it, we will do so if we can afford it.
Could it be abused by profitable businesses that don’t need it?
The short answer is yes, but Revenue monitors every company that uses it. Varadkar said the scheme was not designed to stop the company from making a profit, but rather to keep the company profitable, continue operating, and “close several days a week or lay off employees.” It is designed to allow you to “do nothing”.
How much does it cost the taxpayer?
A total of €1.25 billion has been allocated for the scheme, an estimate based on the number of companies covered and the assumption that it will run until February. “It could end up costing us more,” Varadkar admitted.