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The Energy Bills Discount Scheme (EBDS)

Updated: Jun 28, 2023

Updated 11/04/2023


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Energy Bills Discount Scheme - Summary Statement


The Smart Energy Company is pleased the Government has implemented the Energy Bills Discount Scheme (EBDS) commencing 1st April 2023 until 31st March 2024 for businesses providing further support to businesses after the end of the Energy Bill Relief Scheme (EBRS) on 31st March 2023.


You do not need to do anything to receive the baseline discount for EBDS as your supplier will apply EBDS discounts to bills automatically from mid-April 2023, once the EBDS is passed into law.


If you have been billed for April consumption before EBDS is passed into law and should have received a discount then your supplier will identify and re-bill you.


Under EBDS, there is an additional level of discount available to customers from Energy and Trade Intensive Industries (ETII). You would have to apply for the discount via the Government portal. The portal is due to go live sometime in April.


Under EBDS, there is also an additional level of discount available to heat networks with domestic end consumers. Again, you have to apply for the discount via the Government portal. The portal is due to go live sometime in April.


The Government has published additional information about the EBDS on their website: Energy Bills Discount Scheme - GOV.UK (www.gov.uk)


The Government has published additional information about the ETII aspect of the scheme on their website: Energy Bills Discount Scheme: Energy and Trade Intensive Industries support - GOV.UK (www.gov.uk)


 

Energy Bills Discount Scheme – Key Points


The scheme is available to all non-domestic customers who are on existing fixed price contracts that were 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.


Most non-domestic customers will not see any Government support on their energy bills from April 2023 and any support is likely to be significantly reduced.


For eligible customers, the Government will issue a per-unit discount to their energy bills during the 12 month period from April 2023 to March 2024. This is subject to a maximum discount.

For most non-domestic energy users in Great Britain and Northern Ireland these threshold prices and maximum discounts have been set 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 a price threshold of £107 per 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. The discount is only applied to the wholesale element of the bill and therefore the final per unit price paid by non-domestic customers will differ as it includes other costs such as network charges and operating costs. This is the same approach as the existing EBRS scheme.


The level of support for each organisation will vary depending on type, date of contract pricing and the price of their contract.


Also be aware that for variable contracts (Standard Variable & Deemed) the Government will review the level of discount on a quarterly basis.


 

Energy Bills Discount Scheme – ETII Key Points


As part of these new EBDS measures, the Government has also introduced additional support for customers from Energy and Trade Intensive Industries (ETII).


The Government has published a full list of eligible sectors that may receive an increased discount to their energy bills. The list can be accessed here: 230104_ETII_List_for_gov.uk.pdf (publishing.service.gov.uk)


Customers who are classified as ETII’s are eligible to apply for a higher level of discount. The window for customers to apply for this additional support is 90 days from when the customer becomes eligible for this higher support and the Government will publish further information about how companies within the eligible sectors can apply for ETII eligibility.


All applications for the ETII discount must go through the Government portal and the administration of confirming eligibility is determined by the Government. Suppliers will not be responsible for determining ETII status & customers should be directed to the portal to apply.


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


The remaining 30% of consumption will receive the baseline EBDS discount rates, if eligible.


The Government will continue to update information on the EBDS and support for ETII’s here: Energy Bills Discount Scheme: Energy and Trade Intensive Industries support - GOV.UK (www.gov.uk)

 

Energy Bills Discount Scheme – Heat Networks Key Points


Heat networks usually purchase energy to supply heat through commercial contracts. As non-domestic customers, all eligible heat networks will receive at least the baseline level of support under the EBDS. A higher level of support will be available to heat networks with domestic end consumers.


Eligible organisations will need to take action to receive this support. The Government webpage will be updated with details on how to register in early April. Eligible organisations will have 90 days from the scheme opening to apply for the higher support.


Heat networks will be eligible for the higher level of support if:

  • they meet the definition of a heat network as defined in the EBDS Regulations

  • they are supplied gas or electricity by a licensed supplier for the purposes of generating heat

  • serve one or more domestic end consumers

This scheme aims to bring retail energy prices paid by heat networks down to a specific heat network Minimum Supply Price. This means there are no maximum discounts or wholesale price thresholds for heat networks. This is different to the approach taken for other parts of the Energy Bill Discount Scheme or the Energy Bill Relief Scheme.


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 Prices will be set as:


Electricity - £340 per MWh

Gas - £78.3 per MWh


After their application for the scheme has been approved, heat networks will receive the new discount rate from their energy suppliers. They will then need to pass this onto their domestic customers.


The Government will continue to update information on the EBDS and support for heat networks here: Energy Bills Discount Scheme: heat networks support - GOV.UK (www.gov.uk).


 

Summary of the EBDS by contract type


Note: Most non-domestic customers will not see additional support on their energy bills from April 2023 and any support is likely to be significantly reduced.


Be aware that the Government does not expect to have the legal framework in place until the end of April-23 – any bills generated for April consumption before this is in place will not show any discount. However once in place, and if you are due a discount, your supplier will automatically re-issue bills to provide the discount.


 

FAQ


Will I be eligible for the Energy Bills Discount Scheme (EBDS)?

The Government has proposed the eligibility criteria which you can find on the Government website(link to www.gov.uk/guidance/energy-bills-discount-scheme) . The proposed eligibility criteria for EBDS could change until the scheme is approved by Parliament.


How long does the Energy Bills Discount Scheme run for?

The scheme will apply to eligible non-domestic energy customers from 1st April 2023 until 31st March 2024.


How do I apply for support?

You don't need to contact us to apply for the baseline level of EBDS support, if you’re eligible, we will apply the discount automatically. However, if you are in an Energy and Trade Intensive Industry or Heat Network you must apply to The Department of Energy Security and Net Zero (formerly BEIS) for this higher level of support. The Government has published a list of eligible sectors and will be releasing further information on how to apply soon.


How much of a discount will I receive?

The Government has published the proposed wholesale price thresholds and maximum discount amounts. You can find these on the Government website . These discounts could change until the scheme is approved by Parliament – potentially late April 2023. It should be noted that the discounts under the EBDS will be considerably lower than under EBRS. Bills received before the legislation for the scheme is fully passed, will not include any discount. Once the legal framework is in place, likely at the end of April, you will be rebilled showing the applicable discount.


How will the discount be calculated on my bill?

The discount amount will be shown separately from your normal energy charges and will be shown on your bill as Government Support. This Government Support will include discounts from EBRS and EBDS as applicable.


I have my gas and electricity with different suppliers, will I still be eligible?

The scheme is universal across all energy suppliers across both gas and electricity. No matter which energy supplier you're with, if you're eligible, the support you'll receive will be the same.


Will the EBDS discount vary across suppliers?

No, the Government has set the discount at the same level for all suppliers.


What if I arrange my energy contracts through an energy broker or intermediary?

Energy brokers/Third-Party Intermediaries (TPIs) cannot change the per-unit cost reductions that will be applied to your bills under this scheme. If you're eligible, you don't need to take out a new contract or change your contract for the discount to be applied to your bills.


How do I know if I’m an Energy and Trade Intensive Industry?

The Government has published a list of sectors eligible for the higher level of support. If you believe you are eligible for the ETII discount, you must apply through the Government portal when this goes live.

 

If you would like to know what the Maximum Discounts means for your business, you can complete our Energy Bill Discount Calculator online for free.


 

Get in touch to see what we can do to reduce your costs on your next energy renewals



0151 459 3388 | info@smart-energy.uk


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