The Energy Bills Discount Scheme
The government has confirmed that the Energy Bills Discount Scheme (EBDS) will run for twelve months from 1 April 2023.
The way the EBDS is applied to your organisation will depend on a number of factors, including whether you are on a fixed, flexible, deemed or variable contract.
Watch our webinar to find out more about how different businesses are supported.
Energy Bills Discount Scheme (EBDS) FAQs
Please note that these FAQs are based on the government guidance published to date and may be subject to change. The scheme will be set out in regulations made under the powers provided in the Energy Prices Act 2022. You can view the government guidance here: gov.uk/guidance/energy-bills-discount-scheme
The Energy Bills Discount Scheme (EBDS) will provide business energy discounts to qualifying non-domestic customers through their energy invoices immediately after the closure of the Energy Bill Relief Scheme (EBRS).
The EBDS will run for 12 months from 1 April 2023 to 31 March 2024.
In line with the EBRS, the EBDS will be available to everyone whose energy is supplied on or through a non-domestic contract, including (subject to meeting the eligibility for the scheme):
- 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
As with the EBRS scheme, the government will provide a discount on qualifying customers’ gas and electricity unit prices.
Eligible non-domestic consumers will receive a per-unit discount to their energy invoices for energy consumed 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/megawatt hour (MWh) with a price threshold of £302/MWh
- Gas - £6.97/MWh with a price threshold of £107/MWh
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 are particularly vulnerable to high energy prices due to their energy intensive and trade exposure - referred to as Energy and Trade Intensive Industries (ETIIs) - these sectors will receive a higher level of support, subject to a maximum discount. This discount will only apply to 70% of energy consumption volumes. The maximum discounts and price threshold for these sectors are:
- Electricity - £89/MWh with a price threshold of £185/MWh
- Gas - £40/MWh with a price threshold of £99/MWh
For a full list of businesses in scope, please see the List of sectors eligible for the Energy and Trade Intensive Industries (“ETII”) scheme (PDF, 66.2 KB, 4 pages).
As with the EBRS, suppliers will automatically apply reductions to the invoices of all qualifying customers.
Those that are eligible ETII customers will have to apply for the higher level of support, and further information on how this will work will be published shortly.
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 the industry, but the absolute level of individual invoices will continue to vary across different contracts and tariffs.
For further information and guidance on the scheme, please visit the government’s website: gov.uk/guidance/energy-bills-discount-scheme