The Energy Bill Discount SchemeThe New The Energy Bill Discount Scheme

The Energy Bill Discount Scheme (EBDS) was announced this week.  The programme will offer up to £5.5 billion in funding for business users. The EBDS will run from 31st March 2023 until 31st March 2024 and will have two elements to it.

The universal assistance scheme is a programme that offers savings on energy costs to qualified business users.

The Energy Bill Discount Scheme savings will be immediately applied by suppliers and will cover 100% of energy volume usage for those customers signing new fixed price contracts, those on deemed or out of contract prices, or normal variable tariffs.

Those on flexible energy contracts or comparable contracts, and those on variable “Day Ahead Index” (DAI) tariffs (Northern Ireland scheme only) will be eligible for the savings.

The presented Energy Bill Discount Scheme statement also outlines a suggested method for offering subsidies for energy use to promote Energy and Trade Intensive Industries (ETIIs).

The application procedure will be formed by the end of March, and the proposal specifies that ETII enterprises must apply for the help.

70% of the energy volume used by these businesses will be covered by the assistance, with the remaining 30% getting universal assistance rather than market wholesale prices.

This remark implies that if a company’s energy costs reach a specific level, it will receive a discount. The difference between the threshold price and the energy’s wholesale price will be the amount of the discount.

Under the The Energy Bill Discount Scheme, Businesses who already have energy expenses below the cutoff point will not be qualified for this subsidy.

Universal Discount:

Businesses will receive a discount reflecting the difference between the new price threshold and the relevant wholesale price. This means that businesses with energy costs below this level will not receive support.

> Only when gas prices exceed £107 per MWh for gas and £302 per MWh for electricity will the rebate take effect.

> Businesses who fall below this mark won’t receive any additional assistance with their energy costs.

> Businesses that qualify will get an energy contract discounts on wholesale prices of up to £6.97 per megawatt an hour for electricity (1.96 p/kWh) and £19.61 per megawatt an hour (0.7 p/kWh) for gas.

This is much less than the exisitng EBRS scheme which the Government said is because wholesale energy costs have fallen back to where they were just before Russia’s invasion of Ukraine and almost halved since the current scheme was announced.

The Energy and Trade Intensive Industry Discount:

To qualify for the additional discount is based on whether the firm’s primary SIC code registered with Companies House is on the eligible list.  This SIC code list serves as the reference for identifying whether your company qualifies as an ETII or whether it falls under the universal scheme only.

Under the Energy Bill Discount Scheme, the ETII discount will only cover 70% of the energy usage to more energy and those qualifying ETII companies will have to apply to receive the ETII support. The application process will be in place before the end of March. For the remaining 30% of energy usage, ETIIs will get the universal level of support instead of market wholesale prices.

> Only when gas prices exceed £99 per MWh for gas and £185 per MWh for electricity will the rebate take effect.

> Businesses who fall below this mark won’t receive any additional assistance with their energy costs.

> Businesses that qualify will get an energy contract discounts on wholesale prices of up to £89 per megawatt an hour (8.9p/kWh) for electricity and £40.00 per megawatt an hour (4p/kWh) for gas.

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