Government announce Energy Bills Discount Scheme (EBDS) to continue support for businesses
A new business energy scheme has been announced, beginning 1st April 2023 to 31st March 2024 for eligible non-domestic consumers in Great Britain and Northern Ireland.
The current £18 billion scheme (Energy Bill Relief Scheme) announced in September comes to an end in March 2023. It supports businesses and public sector organisations such as schools and hospitals by providing a discount on wholesale gas and electricity prices.
On 17th October it was announced that an HM Treasury-led review of the scheme would determine support beyond March 2023.
The government website states that the current support was intended as a bridge to allow businesses to adapt. Wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine and have almost halved since the current scheme was announced.
The new scheme therefore aims to strike 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.
What does the scheme mean for my business?
Under the Energy Bills Discount Scheme (EBDS), eligible non-domestic consumers will now receive a per-unit discount during the 12-month period from April 2023 to March 2024, subject to a maximum discount.
The relative discount will ONLY be applied if wholesale rates rise above a certain threshold.
These maximum discounts have been set at:
- 1.961p per kWh with a price threshold of 30.2p per kWh
- 0.697p per kWh with a price threshold of 10.7p per kWh
Will my business be eligible for support?
The discount will be available to those:
- 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 standard variable tariffs;
- on flexible purchase or similar contracts;
- on contracts paying energy costs above a price threshold
Energy and Trade Intensive Industries (ETII) scheme
Organisations who 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), will receive a higher level of support, subject to a maximum discount.
Firms with primary operations in the sectors listed in this document published by BEIS will be eligible for support under the ETII scheme.
For more information about the scheme, visit the government website here.