In recent weeks, many of you may have received emails from your energy supplier about the approaching deadline of 25th July 2023 to apply for a higher level of discount under the Energy Bill Discount Scheme (EBDS). While this may have sparked a glimmer of hope for reduced energy bills, it's crucial to understand that not everyone is eligible for this higher discount rate.
There seems to be a wave of confusion sweeping across many businesses, with some under the impression that they are entitled to this higher level of support, when in fact, they may not be. In this blog, we aim to clear the air surrounding this issue, diving deep into the specifics of who actually qualifies for this scheme. So let's unmask the details and dispel any lingering doubts or misconceptions.
Energy Trade Intensive Industries (ETII) - Energy Bill Discount Scheme
ETIIs can avail of a higher level of support under the EBDS, with the discount applying to 70% of energy volumes. However, you must meet the following conditions:
You should have a non-domestic contract with a licensed energy supplier.
You could be on existing fixed price contracts agreed on or after 1st December 2021, signing new fixed price contracts, on deemed/out of contract or variable tariffs, on flexible purchase (or similar) contracts, or on variable 'Day Ahead Index' (DAI) tariffs (Northern Ireland scheme only).
For ETII customers, the Government has set a wholesale threshold price for electricity and gas, meaning a discount will be applied above those levels. The Government has also set a maximum discount for these customers. However, these discounts will only apply to 70% of an ETII’s energy consumption. The maximum discounts and price thresholds for these sectors are:
•Electricity - £89 per MWh or 8.9 p/kWh with a price threshold of £185 per MWh
• Gas - £40 per MWh or 4.00 p/kWh with a price threshold of £99 per MWh
It's essential to note that qualifying organisations must operate in sectors that meet certain energy and trade intensity thresholds. Sectors have been classified according to the Standard Industry Classification (SIC) code hierarchy, the top 20% of sectors by energy intensity, and the top 40% of sectors by trade intensity across the UK.
The eligibility of the ETII scheme is also subject to the consideration of state aid rules. More detailed descriptions of each SIC code are available here. The full list of eligible sectors can be found at the end of this blog post.
Heat Network Organisations - Energy Bill Discount Scheme
Heat suppliers also stand to gain from this scheme, with higher levels of support available if their heat network:
Supplies heating or hot water to a building or persons in that building.
Is supplied by a licensed supplier.
Supplies one or more domestic customers.
Uses gas or electricity for producing heat.
Don't Miss Out - Energy Bill Discount Scheme
The EBDS represents a significant opportunity for eligible organisations to make substantial energy bill savings. With the deadline for applications looming, it's essential to ascertain your eligibility now and start the application process.
In the coming months, we can expect more guidance for firms who believe their operations are not correctly classified by SIC codes. So, keep an eye out for updates on the EBDS to ensure you don't miss out on potential savings.
Are you interested in estimating your bill costs under the new Energy Bill Discount Scheme? Our user-friendly online calculator is designed to help you determine the potential expenses based on your specific information.
By inputting your details, you can view the maximum discounts available and calculate your monthly bill cost, which can be beneficial for budgeting purposes. It's important to note that this calculation provides an estimate of the maximum discount permitted, and the actual amount you receive may be lower, depending on your agreed-upon rate.
List of Eligible Sectors - Energy Bill Discount Scheme
Here is a list of sectors eligible for support under the ETII scheme, defined according to the SIC hierarchy:
Applying as an Energy Trade Intensive Industry
If your business falls under the Energy Trade Intensive Industry (ETII) categories mentioned in the list above, you could be eligible for the higher rate of the Energy Bill Discount Scheme. This can be a substantial benefit and we strongly encourage eligible businesses to apply. To begin the application process, follow this link.
This will lead you to the relevant government webpage with all the necessary information and documents you need for the application. Don't miss this opportunity to make significant savings on your energy bills.
Understanding Your Eligibility and the Real Impact of EBDS Discounts for Non-ETII Businesses
If you've scanned through the exhaustive list of industries above and found that your business doesn't fit into any of these categories, it means you're classed as a Non-Energy Trade Intensive Industry (Non-ETII). Consequently, you will only qualify for the lower discount rate under the Energy Bill Discount Scheme (EBDS).
This lower discount rate currently stands at
Electricity - £19.61 per megawatt hour (MWh) or 1.961 p/kWh with a price threshold of £302 per MWh
Gas - £6.97 per megawatt hour (MWh) or 0.697 p/kWh with a price threshold of £107 per MWh
However, it's crucial to note that these discounts apply only to the wholesale elements of your energy bills, which typically make up around 40% of the total costs. The remaining 60% is composed of non-commodity costs, which include items such as network charges, operational costs, and environmental levies, to which the discount does not apply.
Given the current energy market dynamics, it is also important to note that the prevailing market levels are lower than the price thresholds set by the government. This means that most businesses renewing their energy contracts at this time will not be entitled to any discount at all. It's essential to be aware of these nuances to better understand the real impact of the EBDS on your business energy costs.
In conclusion, if you've stumbled upon this page, chances are you're grappling with high energy bills and may have discovered that you don't qualify for the Energy Bill Discount Scheme. We understand that this may be disheartening. But fear not! At the Smart Energy Company, we specialise in helping businesses like yours save money on their energy costs, even when discounts or schemes may not apply.
Don't let this opportunity to lower your energy costs pass you by. Click the button below to get a free quote, and let us help you identify the best ways to make your energy expenses more manageable.
0151 459 3388 | info@smart-energy.uk
