The Energy Bills Discount Scheme.
Firstly, what was the Energy Bill Relief Scheme?
The current EBRS provides a discount on wholesale gas and electricity prices for all non-domestic customers such as businesses, charities and the public sector.
The EBRS applies to fixed contracts agreed on or after 1 December 2021, as well as to deemed, variable and flexible tariffs and contracts.
How is the Energy Bills Discount Scheme different?
On 9 January the government announced that the current EBRS will change from 1 April 2023 and become the EBDS that will run until March 2024.
Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one. Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others.
Who is eligible for the Energy Bills Discount Scheme?
As with the original scheme, suppliers, like us, will automatically apply EBDS reductions to the bills of all eligible customers. The EBDS applies to those who are:
On existing fixed price contracts that were agreed on or after 1 December 2021.
Signing new fixed price contracts.
On deemed / out of contract or standard variable tariffs.
On flexible purchase or similar contracts.
On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only).
How much will the bills be reduced with EBDS?
As with the current scheme, the government will provide a discount on your gas and electricity unit prices. Eligible customers will now receive a per-unit discount to their energy bills during the 12 month period from April 2023 to March 2024, subject to a maximum discount.
The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:
Electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
Gas - £6.97 per MWh with a price threshold of £107 per MWh.
The government says that the discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold.
The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.
Is there extra support for energy intensive businesses?
Some non-domestic energy users in Great Britain and Northern Ireland are particularly vulnerable to high energy prices due to their energy intensive and trade exposure, (referred to as Energy and Trade Intensive Industries or ETIIs).
These sectors will receive a higher level of government support, subject to a maximum discount. The maximum discounts and price threshold for these sectors are:
Electricity - £89 per MWh with a price threshold of £185 per MWh.
Gas - £40 per MWh with a price threshold of £99 per MWh.
The government has published a list of sectors eligible for the Energy and Trade Intensive Industries (ETII) scheme. Eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published by the government in due course.
Do I need to apply for the Energy Bills Discount Scheme?
You don’t need to apply, the EBDS will be automatically applied to eligible accounts. Only eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published by the government in due course. If you receive a message and are unsure if it's genuine please visit our staying safe online page.
What happens next?
We're working with the government on the details of how the new EBDS will affect our customers.