The Government's energy scheme to support thousands of businesses with their gas and electricity bills has seen a lower take-up than was expected.
The Temporary Business Energy Support Scheme (TBESS) was approved in Budget 2023 in September with €1.25bn budgeted to assist businesses with up to 40% of the increase in electricity or gas bills.
However new analysis carried out by the Department of Finance has found that just €17.5m has been paid so far, an average of €3,019 to the 5,793 approved businesses.
"The scheme has, to date, seen a relatively lower level of uptake than would have been initially expected and budgeted for," the assessment report states.
Publishing the assessment, Minister for Finance Michael McGrath urged eligible businesses to continue to make claims under the scheme.
"I am urging eligible businesses to continue to make claims under the scheme. Businesses should be aware that the window for making claims in respect of September 2022 will close at the end of this month, so it’s important to complete that claim in the coming days.”
Administered by Revenue, TBESS provides businesses with up to 40% of the increase in electricity or gas bills up to €10,000 per month, with this cap being increased to €30,000 in certain circumstances. The scheme covers the period from September 2022 to February 2023.
According to the assessment, €17.49m has been approved for businesses up until January 25 to help offset the increase in energy costs. The report states that 15,275 businesses have registered for the scheme and 9,148 have commenced the claim process. 5,793 claims have been approved with a value of €17.49m of which €13.24m has been paid out.
The figures show retailers are the most significant scheme users with just over 3,000 making applications. This was followed by cafe/restaurants with 1,817 applications, bars with 1,201, manufacturing firms with 776 applications and hotels with 686. Dublin-based businesses form the largest share of registrations with 26.8% followed by County Cork with 14.8%.
TBESS was introduced in response to the soaring energy bills businesses faced following the rapid increase in prices for oil and gas last year, largely in response to the Russian invasion of Ukraine. The Irish Hotels Federation estimated that energy costs for the average hotel increased to between 10% and 12% of total revenue compared with an average of 4% in 2019.
Owner of Cork's Vienna Woods Hotel Michael Magner told the Irish Examiner that their gas bill for July 2022 jumped to €12,000 from €3,500 in July 2019.
When the government announced the budget in September, market prices for gas were running at more than ten times their long-term average. The Government forecast that inflation would remain above 7% for 2023.
However, wholesale gas prices have eased significantly since then on the back of high storage levels and a mild winter. As a result, the Department of Finance said inflation this year is now expected to be lower than anticipated at budget time. "This easing in wholesale energy markets supports the idea that inflation has now peaked and is on a downward trajectory," the assessment notes.
Depsite the concern over the low uptake for TBESS, the assessment states that it only opened for claims in early December. "It is expected that claims should increase in the coming weeks."