Energy Bill Discount Scheme announced
Last night, the Chancellor announced the new Energy Bills Discount Scheme (EBDS) to support businesses with their energy bills. The EBDS will run from 1 April 2023 (when the current EBRS ends) until 31 March 2024 and will see discounts applied to wholesale gas and electric prices above a wholesale price threshold.
What support is available under EBDS?
Support available under the EBDS is more limited than under EBRS. A £5.5 billion cap has been set for EBDS, based on estimated volumes.
Eligible non-domestic energy customers will now receive a unit discount of up to £6.97/MWh to their gas bill and a unit discount of up to £19.61MWh to their electricity bill during the 12-month period between 1 April 2023 to 31 March 2024, above a threshold level of £107MWh for gas and £302MWh for electricity.
You do not need to apply for EBDS - support will automatically be applied to bills by your supplier.
The EBDS discounts will be available to those:
- 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;
- On contracts paying energy costs above a price threshold;
- On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)
More details are available here.
How does EBDS support compare with EBRS support?
Under EBRS, the discount applied is calculated by comparing the estimated wholesale portion of the unit price to the 'government supported price' for wholesale gas and electric. This effectively set a cap to energy bills support.
The government supported prices under EBRS are:
- Electricity - £211MWh / 21.1pKWh
- Gas - £75MWh / 7.5pKWh