What is the UK Government’s "Energy Bills Discount Scheme"?

The UK government recently announced the new "Energy Bills Discount Scheme" (EBDS), designed to help businesses save money on their energy bills. This scheme replaces the Energy Bill Relief Scheme when it concludes in March 2023 and is open to businesses of all sizes.

This article explores the details of the UK government’s EDBS, including who is eligible, how much the discount is, and how businesses can apply.

How Much Will You Save with the Energy Bills Discount Scheme?

Through the Energy Bills Discount Scheme (EBDS), eligible non-domestic consumers will receive a per-unit discount on their energy bills. How much you save with the EBDS depends on your wholesale energy price. According to the gov.uk website:

"The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel."

As with the Energy Bill Relief Scheme (EBRS), you're subject to a maximum discount, which is as follows:

• Electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.

• Gas - £6.97 per MWh with a price threshold of £107 per MWh

The UK government recognises that businesses that are intensive energy users (referred to as Energy and Trade Intensive Industries or ETIIs) are more vulnerable to high energy prices. Subsequently, they're providing them with a higher maximum discount and price threshold:

• Electricity - £89 per MWh with a price threshold of £185 per MWh

• Gas - £40 per MWh with a price threshold of £99 per MWh

You can find out if your business classes as an ETII in this list of eligible sectors.

An example provided by the gov.uk website shows how much you could save:

"A typical small retail store uses 2 MWh of gas and 1 MWh of electricity each month. Under the new scheme, it could receive up to £403 of taxpayer funded support in the 23/24 financial year."

The Energy Bills Discount Scheme is open to all businesses in the UK, regardless of size or sector. However, businesses must meet certain criteria to be eligible for the scheme. As per the gov.uk guidance, eligibility is as follows:

The new scheme will be available to everyone on a non-domestic contract, including;

• Businesses

• Voluntary sector organisations, such as charities

• Public sector organisations, such as schools, hospitals, and care homes

Who are;

• 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 variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only).

When Will the Energy Bills Discount Scheme be Available?

The Energy Bills Discount Scheme (EBDS) replaces the Energy Bill Relief Scheme (EBRS), which came into effect on 1st October 2022 and will conclude on 31st March 2023. The EBRS will start on 1st April 2023 and run for a year until April 2024.

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Under the Energy Bills Discount Scheme (EBDS), the applicable discount will automatically apply to the energy bills of eligible businesses (non-domestic customers).

You don't need to apply or online or request the standard EBDS discount. However, suppose your business is classed as an Energy and Trade Intensive Industries (ETIIs), making you eligible for higher support. In that case, you need to apply for the increased maximum discount amount.

Will the Energy Bills Discount Scheme Save Your Business Money?

The UK government’s Energy Bills Discount Scheme is a great way for UK businesses to save money on their energy bills. However, there's more that you can do. If you've not switched energy suppliers in some time, it's worth comparing your options, as you may find you can make further savings by choosing a better price energy contract.

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At BusinessComparison; we make it quick and easy to find the best energy prices for your business. By telling us a little about your business, we compare a range of providers to find you the best price from our panel of energy suppliers. Put simply; we make it easy to save time and money.

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