The government has announced a new Energy Bill Discount Scheme which will replace the current Energy Bill Relief Scheme ending in March. Let's look at what it means.
The current Energy Bill Relief Scheme was designed as a temporary measure to protect businesses from soaring energy costs, but this support was always time-limited, and, with data showing that wholesale gas prices have now fallen to levels just before the invasion of Ukraine and have almost halved since the current scheme was announced, the Government now deems it time to introduce something to replace it: the Energy Bill Discount Scheme (EBDS).
The Energy Bill Discount Scheme [EBDS] for businesses and non-domestic users has been announced by the UK Government, running from 1st April 2023 to 31st March 2024 following the ending of the current [EBRS] scheme in March 2023. EBDS will provide extended support and protection to businesses and non-domestic users from high and volatile prices, albeit at a lower level than the EBRS.
The new scheme will apply to wholesale commodity costs and apply an automatic discount to bills of up to £19.61/MWh (1.961p/kWh) for electric and £6.97/MWh (0.697p/kWh) for gas if wholesale commodity costs exceed the set thresholds of £302/MWh (30.2p/kWh) and £107/MWh (10.7p/kWh) for electric and gas respectively.
For those businesses in intensive energy industries, such as libraries, museums and historical sites/buildings, increased support is available. The applied discount will be the difference between the wholesale commodity costs and the set thresholds of £185/MWh (18.5p/kWh) for electric and £99/MWh (9.9p/kWh) for gas, up to a maximum discount of £89.1/MWh (8.91p/kWh) for electric and £40/MWh (4p/kWh) for gas. Intensive energy industries will only have the available discount applied to 70% of usage.
Chancellor of the Exchequer, Jeremey Hunt commented, “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able”.
Yes! We are working closely with its suppliers to clarify how the scheme will be managed in practice and will provide regular updates as and when we have more to tell you.
Please reach out to your Account Manager if you have any further questions about the EBDS. Alternatively, you can drop us an email by clicking the ‘Contact Us’ button.
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