CHRIS RICHARDS | 28 JULY 2023
The Energy Bills Discount Scheme (EBDS) is an initiative launched by the UK government to provide financial relief to non-domestic customers grappling with energy costs.
This scheme, which is in effect from 1 April 2023 to 31 March 2024, supersedes the previous Energy Bill Relief Scheme that aided businesses and organisations from 1 October 2022 to 31 March 2023.
The EBDS is a three-pronged scheme. The first component, the baseline discount, offers some relief with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland. This support is applied automatically. The second and third components, the Energy and Trade Intensive Industries (ETII) discount and the Heat Network discount provide a higher level of support to businesses and organisations in eligible sectors and to heat networks with domestic end consumers, respectively.
However, these discounts necessitate an application. After 25 July 2023, ETIIs can only apply for a higher level of support if they become eligible after 26 April 2023. Similarly, heat suppliers that were eligible for the higher level of support on 26 April must apply as soon as possible. The scheme was established under the Energy Prices Act 2022.
The scheme is open to all non-domestic energy supply contract holders with a licensed energy supplier.
This includes businesses, voluntary sector organisations like charities, and public sector organisations such as schools, hospitals, and care homes. Eligible contracts include existing fixed price contracts agreed on or after 1 December 2021, new fixed price contracts, deemed/out of contract or variable tariffs, flexible purchase contracts, and variable 'Day Ahead Index' tariffs (Northern Ireland scheme only).
While most non-domestic customers will not see additional support on their energy bills from April, and any support is likely to be significantly reduced, it is crucial that organisations continue to shop around for the best deals as the actual price you pay for your energy will vary between energy suppliers.
Eligible non-domestic customers will receive a per-unit discount on their energy bills during the 12-month period from April 2023 to March 2024.
This is subject to a maximum discount. The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. For most non-domestic energy users in Great Britain and Northern Ireland, these threshold prices and maximum discounts have been set at £19.61 per megawatt-hour (MWh) with a price threshold of £302 per MWh for electricity, and £6.97 per MWh with a price threshold of £107 per MWh for gas.
Support will also be extended to non-domestic customers that use energy provided by licence-exempt suppliers, where prices paid are pegged to wholesale prices.
This includes energy taken from the public electricity or gas grid, or who receive electricity or gas via wire or pipe.
The Energy Prices Act 2022 provided the government with the powers to establish the EBDS, ensure scheme benefits are passed on to consumers, and provide for an effective compliance and enforcement regime.
For more detailed information about the EBDS, you can read the rules and methodology for this scheme, find the guidance and templates to help you apply for ETII and heat networks support, find out the discount rates, and learn more about non-standard cases on the official government website.
The Energy Bills Discount Scheme is a crucial initiative by the UK government to support businesses and organisations struggling with energy costs. By understanding the eligibility criteria and how to apply, eligible entities can take full advantage of the scheme and potentially save on their energy bills.
As of 24 July 2023, the scheme has been updated with more information about who can apply for the higher level of support. It's important to stay updated with the latest changes to the scheme to ensure you're making the most of the available support.
Remember to continue paying your bills as normal until the discount is applied. The discount will apply to bills from 1 April 2023. The daily discount rates available for businesses and other non-domestic energy users on fixed, default, and variable contracts are published on the government's official website.
The EBDS is a UK government initiative designed to provide financial relief to non-domestic customers, including businesses, struggling with energy costs. The scheme offers a baseline discount that is applied automatically to eligible non-domestic customers' energy bills. Additionally, there are two other components - the Energy and Trade Intensive Industries (ETII) discount and the Heat Network discount - that provide a higher level of support but require an application. These discounts can help reduce your business's energy costs.
The EBDS is open to all non-domestic energy supply contract holders with a licensed energy supplier. This includes businesses on existing fixed price contracts that were agreed on or after 1 December 2021, new fixed price contracts, deemed/out of contract or variable tariffs, flexible purchase contracts, and variable 'Day Ahead Index' tariffs (Northern Ireland scheme only).
Eligible non-domestic customers will receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024. This discount is subject to a maximum limit. The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. For most non-domestic energy users in Great Britain and Northern Ireland, these threshold prices and maximum discounts have been set at £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh for electricity, and £6.97 per MWh with a price threshold of £107 per MWh for gas.
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