With global energy markets remaining volatile and uncertain for the foreseeable future, the government has committed to provide further support for businesses as the Energy Bill Relief Scheme (EBRS) comes to an end on 31 March 2023. The new Energy Bills Discount Scheme (EBDS), will provide support for business and we have summarised our current understanding of how the scheme will work below.
Who’s eligible for the Energy Bills Discount Scheme? All commercial business and organisations are eligible. The support will apply to any fixed contracts agreed on or after 1 December 2021, as well as to deemed, variable and flexible contracts.
How does the EBDS work? The Energy Bills Discount Scheme will run for 12 months and apply for consumption between 1 April 2023 and 31 March 2024. Businesses will receive a £/MWh discount on their energy bills. Businesses will only be provided a discount when the wholesale prices go over a certain price threshold and there will be a limit to the level of discount a business can receive. These parameters have been set by government as:
- Electricity: a maximum discount of £19.61/MWh and discounts being applied when the wholesale price goes above £302/MWh
- Gas: a maximum discount of £6.97/MWh and discounts being applied when the wholesale price goes above £107/MWh
The amount of discount businesses receive will be calculated by taking the difference between the relevant wholesale price and the price threshold. So, if for example, an electricity contract’s wholesale price is £320/MWh, that business would be entitled to a discount of £18/MWh. Discounts will automatically be applied. There is no need to contact the supplier. Guidance on the Energy Bills Discount Scheme has been published on the government website and is available here.
