The Energy Bills Discount Scheme for businesses
Read more about the scheme and how it intends to support UK businesses.
The Energy Bills Discount Scheme - what you need to know
The government Department for Energy Security and Net Zero (DESNZ) has announced the Energy Bills Discount Scheme (EBDS) for business energy customers in Great Britain.
This replaces the 6-month Energy Bill Relief Scheme (EBRS) which ran from 1 October 2022 until 31 March 2023.
It has been designed to reduce business energy consumers’ exposure to the volatile wholesale energy markets over the next twelve months and sees the government commit to providing a discount on wholesale gas and electricity prices for all non-domestic customers.
The discount will run for a 12-month period, starting after 1 April 2023.
The maximum discount has been set for electricity at 1.961p/kWh, with a price threshold of 30.2p/kWh. For gas, the maximum discount is 0.697p/kWh, with a price threshold of 10.7p/kWh.
Customers do not need to take any action to access the standard EBDS support. If your business is eligible for additional support this application must be made via the government’s EBDS application process.
Customers on a fixed, flexible, or default contract may be eligible for the scheme. Discounts will start to be applied to eligible May invoices (for April's consumption) and then will continue to be applied during the supported scheme period which is due to end on 31 March 2024. This support is targeted at all eligible non-domestic energy consumers, this includes businesses, charities, and public sector bodies. The relative discount will be applied if the wholesale prices are above a certain price threshold. Energy and Trade Intensive Industries (ETIIs) and Qualifying Heat Suppliers (QHS) can apply via the government's application process to receive a higher level of support.
All fixed contract customers will be eligible for the EBDS discount providing they meet the relevant thresholds. The discounts will automatically be applied from May invoices for April's energy consumption.
OUT OF CONTRACT (DEEMED AND EXTENDED)
All deemed or extended supply contracts will be eligible for the EBDS discount providing they meet the relevant thresholds.
All flexible contract customers will be eligible for the EBDS discount providing they meet the relevant thresholds. If you’re on a flexible purchase contract, your price reduction will depend on the difference between your monthly weighted average baseload price (determined by your individual hedging approach) and the government supported price. In this case the maximum support available per unit of energy will also be limited by the maximum discount and the floor price. The government is encouraging customers on flexible contracts to continue to procure energy in the usual way. Cashing in, or changing contracting positions or financial instruments, or other similar actions in order to maximise support under the scheme may impact eligibility.
Eligibility for additional support
Energy and Trade Intensive Industries (ETIIs) will receive a higher level of support, subject to a maximum discount. These industries are particularly vulnerable to high energy prices due to their energy intensive and trade exposure. The support will be limited to 70% of consumed volume, with the remainder receiving standard EBDS support, where eligible. All eligible ETII’s will be required to apply via the government's application process. Energy suppliers have no role in determining ETII eligibility. If you believe you are an ETII, you should apply to DESNZ with the required information to prove you are eligible for ETII support. A list of information required from you to apply will be visible on the government website when the application window opens. For successful applications, DESNZ will issue an ETII certificate with an effective date from the date you are eligible to receive any enhanced ETII support. For ETIIs, the maximum discount has been set as electricity - 8.9p/kWh with a price threshold of 18.5p/kWh and gas - 4.0p/kWh with a price threshold of 9.9p/kWh.
An enhanced level of support is also being offered to Qualifying Heat Suppliers (QHS). The criteria to qualify will be based on the heat supplier being a person who supplies and charges for supply of heating and/or hot water to domestic heat consumers through the heat network. All QHSs are required to apply via the government's application process and will receive a QHS certificate proving they are eligible for this support. This certificate will have an effective date which is the date from which the customer is eligible to receive enhanced QHS support. This information will also be provided to us as your supplier.
To find out more about the Energy Bills Discount Scheme or discover other useful articles and blogs, please visit Energy Insights which is your hub of useful resources.
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Our FAQs about the Energy Bills Discount Scheme
The Energy Bills Discount Scheme (EBDS) starts on 1 April 2023 and is expected to last for 12 months until 31 March 2024.
No, Energy & Trade Intensive Industries (ETIIs) and Qualifying Heat Suppliers (QHS) will receive additional support.
The support will show as a discount on customer’s invoices from April 2023 (billed in May) and continue until 31 March 2024.
All non-domestic customers in Great Britain will be eligible for the EBDS, provided they:
Have a fixed price energy contract, signed on or after 1 December 2021
Are in the process of signing a new fixed price contract
Are out of contract or deemed variable tariffs
Have a flexible purchase contract or similar
Government is continuing to encourage customers on flexible contracts to procure energy in the usual way
Some businesses may not see a significant discount, if any, under the new scheme.
As with the existing EBRS, the standard EBDS support for non-ETIIs will be applied automatically to non-domestic customer accounts. ETIIs and QHSs will need to submit an application to the government to receive the increased support.