Energy Bill Discount Scheme FAQs
The EBDS is a new scheme to provide business energy bill support immediately following the governments’ Energy Bill Relief Scheme which runs until March 31st, 2023.
The EBDS will start on April 1st, 2023 and will replace the Energy Bill Relief Scheme (EBRS).
The government was clear that the levels of support provided by the EBRS were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows wholesale gas prices have almost halved since the current scheme was announced.
The new scheme strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion based on estimated volumes.
As with the original scheme, the new scheme will be available to everyone on a non-domestic contract including:
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals, and care homes
- 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)
As with the EBRS scheme, the government will provide a discount on your gas and electricity unit prices. Eligible non-domestic consumers 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 these maximum discounts have been set at:
- electricity - £19.61 per MWh (1.961p/KWh) with a price threshold of £302 per MWh (30.2p/KWh)
- gas - £6.97 per MWh (0.697p/KWh) with a price threshold of £107 per MWh (10.7p/KWh)
- 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
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.
Recognising that 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 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
For a full list of businesses in scope, see the List of sectors eligible for the Energy and Trade Intensive Industries (“ETII”) scheme (PDF, 66.2 KB, 4 pages).
The EBDS will run for 12 months from 1 April 2023 to 31 March 2024
No - as with the original scheme, we will automatically apply reductions to the bills of all eligible non-domestic customers.
Eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published in due course.
The discount applied will be in pence per kilowatt hour (p/kWh). The p/kWh government support for comparable contracts will be the same across suppliers, but the absolute level of individual bills will continue to vary across different contracts and tariffs.
For more information, please visit https://www.gov.uk/guidance/energy-bills-discount-scheme