What is EBDS?
The previous £18 billion scheme – Energy Bill Relief Scheme (EBRS) – came into effect on 1 October 2022 and was always intended to run until 31 March 2023.
The government has been clear that such levels of support were time-limited and intended as a bridge to allow businesses to adapt. The latest data shows that wholesale prices have now fallen to levels just before Putin’s invasion of Ukraine, and have almost halved since the current scheme was announced.
The new scheme, Energy Bill Discount Scheme (EBDS), strikes a balance between supporting businesses over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion based on estimated volumes.
EBDS – About the scheme
The scheme is made up of three different parts:
- The baseline discount will provide some support with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland – this support will be applied automatically.
- The Energy and Trade Intensive Industries (ETII) discount will provide a higher level of support to businesses and organisations in eligible sectors – you will need to register to get this support.
- The Heat Network discount will provide a higher level of support to heat networks with domestic end consumers – you need to register to get this support
Who will be eligible for EBDS?
Customers with a non-domestic energy account, such as companies, non-profit organisations, and public institutions like hospitals and schools, will be eligible for support under EBDS, which will be in effect for a period of twelve months, from 1 April 2023 to 31 March 2024.
All non-domestic customers will be eligible for the support, with the exception of those on current fixed-term contracts with a price agreed upon before 1 December 2021.
As a result, the following clients will qualify for assistance:
- Those on fixed contracts that were agreed on or after 1 December 20221 (even if the contract starts at a later date)
- Those signing new fixed contracts now
- Those on deemed, variable or out-of-contracts rates
- Those on flexible contracts
Difference between EBRS & EBDS
Below we have highlighted a key comparison when looking at the EBRS scheme Vs the EBDS scheme to help customers understand some of the critical differences.
EBDS baseline discount
For the baseline support of this scheme the government has set what they are referring to as the ‘price threshold’.
- Electricity price threshold
- £302/MWh (30.2p/kWh)
- Maximum discount available – 1.961p/kwh
- Gas price threshold
- £107/MWh (10.7p/kWh)
- Maximum discount available – 0.697p/kwh
This means that the government will provide a discount for anyone paying more than 30.2p/kWh wholesale for their electricity or 10.7p/kWh wholesale for their gas if they are eligible.
Maximum discount applies.
EBDS for Energy & Trade Intensive Industries (ETII)
A higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – A long-standing category primarily including manufacturing businesses.
- Electricity price threshold
- £185/MWh (18.5p/kWh)
- Maximum discount available – 8.91p/kwh
- Gas price threshold
- £99/MWh (9.9p/kWh)
- Maximum discount available – 4p/kwh
This means that the government will provide a discount for organisations paying more than 18.5p/kWh wholesale for their electricity or 9.9p/kWh wholesale for their gas if they are eligible.
This higher level of discount will only apply to 70% of energy volumes. The other 30% of consumption will have the EBDS baseline discount applied.
Businesses will need to register for a higher level of ETII support
Registering for ETII support
New organisations, or newly eligible organisations will have 90 days to apply from the date at which they become eligible.
- Eligible organisations will have 90 days from the scheme introduction date of 26 April to apply for higher support.
Applicants will need to provide information about their organisation or business including:
- Contact details
- Registered name and address
- Company registration number (if you have one)
- Up to 4 ETII eligible SIC codes
- Whether you pay bills directly to an energy supplier and details of any intermediaries involved (such as a landlord)
- The names of gas and/or electricity suppliers
- The gas or electricity meter point numbers (MPRN or MPAN) associated with the property – found on your bill from your energy supplier
- The name of your organisation as it appears on your bill from your energy supplier(s)
- A declaration letter signed by a named director or equivalent of your organisation or business (a template will be provided)
The government will determine eligibility based on the details provided when registering. In some instances, further validation of eligibility may be required, meaning that the organisation will be asked for additional information. The government will use various data sources, including Companies House data and eligibility for other support schemes to make the initial determination.
Energy suppliers cannot apply the discount rate until eligibility has been confirmed by the Department for Energy Security and Net Zero. Until then, organisations should continue to pay their energy invoices.
If we consider the time it may take for organisations to apply, service delivery should expect rebills for these customers.
EBDS informationEnergy Bills Discount Scheme – GOV.UK (www.gov.uk)
EBDS ratesEnergy Bills Discount Scheme: discounts for fixed, default and variable contracts – GOV.UK (www.gov.uk)
EDBS discount spreadsheetebds-discounts-17042023.xlsx (live.com)
EBDS ETII informationEnergy Bills Discount Scheme: Energy and Trade Intensive Industries support – GOV.UK (www.gov.uk)
ETII Sectors:230104_ETII_List_for_gov.uk.pdf (publishing.service.gov.uk)
EBDS registration: Will be added on 26/04/23 once released.