The current government-led Energy Bill Relief Scheme (EBRS) which was announced in September comes to an end in March 2023. This is being replaced with a new Energy Bill Discount Scheme (EBDS) for businesses, charities and public sector organisations and will run from April 2023 to April 2024.
Who is eligible?
As with the current scheme, support will be available to companies that:
· Signed a fixed-price contract on or after 1st December 2021
· Is supplied in a flexible purchase contract
· Is supplied on a deemed or out-of-contract basis
· Agree a new contract during the scheme period.
Customers will automatically move from the EBRS to EBDS and relevant discounts will be applied.
What is the new discount?
The discount is applied to the wholesale price of gas and electricity and will be significantly less than the current scheme. No relief will be applied to daily standing charges.
Eligible companies will receive a per-unit discount on their energy bills subject to a maximum discount which will be applied if wholesale prices are above a certain price threshold.
· Electricity – maximum discount of 1.961p per kilowatt-hour (kWh) with a price threshold of 30.2p per kWh.
· Gas – maximum discount of 0.697p per kWh with a price threshold of 10.7p per kWh.
Energy and Trade Intensive Industries (ETIIs)
The government has also recognised a group of Energy and Trade Intensive Industries (ETIIs) for further preferential support.
The maximum discounts and price thresholds for these sectors are:
· Electricity - maximum discount of 8.9p per kWh with a price threshold of 18.5p per kWh
· Gas – maximum discount of 4p per kWh with a price threshold of 9.9p per kWh
This higher level of support will only be applicable to 70% of energy volumes, with the other 30% eligible for the basic rate of support.
ETIIs eligible will need to apply for the higher discount rate but how to apply hasn’t yet been released by the government. We will share further information when we have been notified.
A medium-sized manufacturer uses 1600000 kWh of gas and 200000 kWh of electricity each month. Under the new ETII scheme, it could receive up to £687,120 of taxpayer-funded support in the 23/24 financial year.
The full list of ETIIs businesses in scope can be found here.
For more details on the Energy Bill Discount Scheme visit the government website here.
For help and support with your business energy contact our team.
0114 327 2645