Energy Bills Discount Scheme

The EBDS is a new scheme to provide business energy bill support immediately following the government’s Energy Bill Relief Scheme, which ended on March 31st, 2023.

The EBDS will replace the Energy Bill Relief Scheme (EBRS).

EBDS is split into three (3) different sub-schemes, listed below, with most eligible non-domestic customers falling under the baseline discount:

• Baseline Discount: This will provide some support with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland. Discounts will be applied to energy usage between April 1st 2023 and March 31st 2024. This support will be automatically applied to energy bills.
• Energy and Trade Intensive Industries (ETII) Discount: Those non-domestic customers who primarily operate within specific published industry sectors will be entitled to a higher level of support. Organisations will need to take action to receive the higher level of support.
• Heat Network Discount: Heat networks which supply energy to domestic end users will again receive a higher level of support. Qualifying Heat Suppliers (QHS) are required by law to take action to receive the higher level of support.

As with the original scheme, the new scheme will be available to everyone on a non-domestic contract including:

• businesses
• voluntary sector organisations, such as charities
• public sector organisations such as schools, hospitals, and care homes

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)

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 on 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.

Eligibility and discount details for Energy & Trade Intensive Industries (ETIIs) and Heat Networks are different; details can be found below.

Non-domestic customers operating primarily in sectors that have been identified as the most energy and trade intensive may receive a higher level of support.

To be considered an eligible ETII, organisations must meet the eligibility criteria for the baseline part of the scheme as well as the following:

• Operating primarily within an eligible sector, i.e. 50% or more of the organisation’s revenue for the relevant period fell within an eligible sector and is being generated in the UK
• The organisation physically consuming the energy will need to be the one to apply for the higher discount
• For Local Authority entities, eligibility will be determined at a premise level. Where there are no relevant accounts, the Local Authority will be required to declare that at least 50% of the space is taken up by operations within an eligible sector

Organisations will receive a discount reflecting the difference between the price threshold and the relevant wholesale price. The thresholds are:

• Electricity - £185 per MWh

• Gas - £99 per MWh

This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89/MWh for electricity. The baseline level of support will apply for the remaining 30% of energy volumes where the customer's wholesale price meets the baseline eligibility criteria.

Eligible ETII customers will need to apply for the higher level of support via a portal on the government's website. Further details on how and when to access the digital portal will be published in due course. 

Only heat networks that provide domestic end users are eligible for the additional discount as they fall under a commercial meter.

To be eligible, Heat Suppliers must:

• Meet the definition of a heat supplier, as defined in EBDS regulations

• Are supplied gas and/or electricity by a licensed supplier for the purpose of generating heat

• Serve one or more domestic customer

The scheme will support the wholesale element of a heat network's energy tariff, up to the point that the Minimum Supply Price is achieved. The Minimum Supply Price will be set as £78.3/MWh for Gas, and £340/MWh for Electricity.

Heat Networks (or Qualifying Heat Suppliers (QHS)) will also need to apply for the discount via a portal on the government's website, with a similar validation process and timeframes expected. Further details on how and when to access the digital portal will be published in due course.  

The EBDS will run for 12 months from April 1st 2023 to March 31st 2024.