An Introduction To The Energy Bill Discount Scheme (EBDS)
Introduced at the beginning of January by the UK government, the Energy Bill Discount Scheme or the EBDS, for short, will spring into action from 1 April 2023. This will not only see the beginning of a new support scheme for businesses but will see the end of the temporary Energy Bill Relief Scheme (EBRS).
What is happening to the EBRS?
The EBRS, which we have touched on in a number of previous blogs, will be coming to an end on the 31st March 2023.
The government was clear from the beginning that this scheme would only be a temporary solution for businesses and all non-domestic energy customers to deal with the effects of rising wholesale gas and electricity prices. As wholesale gas prices have now fallen back down to levels seen before the invasion of Ukraine, the government will be ending the EBRS and instead introducing a new scheme, the EBDS.
Key facts about The Energy Bill Discount Scheme
Below are the simple key facts about the Energy Bill Discount Scheme, that all business energy customers should be aware of:
- This new scheme will come into effect from April 1st 2023
- It has been designed to support businesses over the following 12 months.
- The new scheme will limit the taxpayer’s exposure to volatile energy markets, with a cap that will be set at £5.5 billion.
- The EBDS will then come to an end on 31st March 2024.
What does this mean for business energy customers?
This new scheme will provide an energy bill discount to all eligible businesses. This will be a per-unit discount, subject to a maximum discount. These maximum discounts have been set at:
- 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
However the government has recognised that there are particular sectors where the higher energy prices leaves them more vulnerable than others. The list of Energy and Trade Intensive Industries (ETII) details which businesses are included in this. Those within these sectors will receive a higher level of support from the government. The maximum discounts for these will be:
- Electricity – £89 per MWh with a price threshold of £185 per MWh
- Gas – £40 per MWh with a price threshold of £99 per MWh
Just like previous schemes, customers do not have to actively apply reductions to bills. Instead, suppliers will do this on your behalf. However, if you are a company working within an industry listed on the ETII list, you will have to apply for the higher support available. The discount you are eligible for will be deducted in pence per kilowatt hour.
It is important to note that depending on the tariff and contract you are on and your individual organisation, the level of support will vary.
Are you eligible for the Energy Bill Discount Scheme?
On the official government website, the eligibility criteria has been outlined as anyone who is on a non-domestic energy contract including the following:
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals, and care homes
- 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)
For More information about the EBDS Scheme or to confirm that you are eligible, please do not hesitate to contact the D-ENERGi customer support team. We will be happy to help explain the scheme in more detail and explain how this will benefit your organisation from April onwards.