Tughans have supplied the following update on the Energy Bills Discount Scheme.
The Government has recently announced the introduction of the Energy Bills Discount Scheme (EBDS), which secures continued support with energy bills for non-domestic customers.
The new scheme will replace the Government’s existing Energy Bill Relief Scheme for businesses (whereby discounts were applied automatically to all non-domestic tariffs), which comes to an end on 31 March 2023. EBDS will run for a further 12 months from 1 April 2023 to 31 March 2024.
An additional scheme was also announced for those customers falling within what the Government has called “Energy and Trade Intensive Industries” (ETII) as part of EBDS, allowing those customers to apply for a higher level of support.
Terms of the EBDS Scheme
Under the scheme, eligible non-domestic customers (including businesses, public sector organisations and charities) will continue to get a discount on their wholesale gas and electricity prices, albeit at a lower level than is currently available.
Eligible customers will see a unit discount of up to £19.61/MWh applied to their electricity bill and a unit discount of up to £6.97/MWh for their gas bill, except for those benefitting from lower energy prices (including through their own negotiated power purchase arrangements).
These discounts will be subject to an overall cap of £302/MWh for electricity and £107/MWh for gas.
My business is a non-domestic customer – what do I need to do?
Most non-domestic customers do not need to do anything other than check their energy bills to ensure that the discount has been properly applied as suppliers should automatically apply the reduction to eligible customers’ energy bills.
Energy and Trade Intensive Industries Support Scheme
Customers whose operations fall within the ETII categories may be eligible for this additional benefit and will have to apply for the support once the ETII support scheme is opened.
The full detail on eligibility for the scheme and the application process is yet to be published, however the Government has indicated that further guidance is due by the end of March 2023.
Organisations within scope will receive a gas and electricity bill discount based on the difference between a price threshold and the relevant wholesale price, subject to a maximum unit discount. This supported price will be £99/MWh for gas and £185/MWh for electricity and the cap is expected to be £40.0/MWh for gas and £89.1/MWh for electricity.
There is a long list of industries which may be eligible for the scheme, including:
Fossil fuel production
Stone mining & quarries
Food processing & production
Manufacture of beers, cider & wine
I think my business might fall into one of the ETII sectors – what do I need to do?
If you think that you might fall into one of these sectors then we recommend that you keep an eye out for the publication of additional guidance, due by the end of March 2023.
Eligible companies will then need to apply to receive this additional level of this support, so it is important to monitor this carefully. Remember, this scheme is not automatic – even if your organisation falls within the relevant sector.
If you or your business require any assistance in interpreting whether you are eligible for ETII support scheme or require any general assistance with your energy requirements (including power purchase arrangements, considering renewable installations (like solar panels or wind turbines) or anything else, please feel free to reach out to Andrew Kirke or your usual Tughans’ contact.
Partner – Energy and Commercial Department
Tel: +44 (0) 28 9055 3306