Energy Bills Discount Scheme: Your questions answered

by | Jan 9, 2023

On Monday, the Chancellor announced the government’s plans for energy support post-April 2023. Named the ‘Energy Bills Discount Scheme’, the 12-month initiative moves away from capped energy prices and introduces discounts for each unit of energy.

Confused by the announcement? We have answered your questions below

What is the Energy Bills Discount Scheme (EBDS)?

The EBDS is a new scheme for business energy support that will be implemented when the original Energy Bill Relief Scheme (EBRS) comes to an end in April 2023. It’s scaled back in comparison to the £18 billion package introduced in the Winter.

The Government’s announcement reads: ‘From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.’

Is my business eligible for the scheme?

Companies paying less than £107 per MWh for their gas and £302 per MWh for their electricity will not receive this support.

Electricity and gas contracts are currently trading at approximately £490 per MWh for the former and £170 per MWh for the latter.

So, all businesses within the beauty industry that are eligible under the current (EBRS) will continue to receive a cut in energy bills from April 2023.

What’s the difference between the EBRS and the Energy Bills Discount Scheme?

Previously, the Treasury capped business energy bills by setting a ‘government-supported price’ of £211 per megawatt hour (MWh) of electricity and £75 per MWh of gas. Instead of

continuing to cap bills, discounts will be applied to each unit of energy supplied via a licensed energy supplier.

Do I need to apply for the new scheme?

No – the government’s statement states: ‘Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.’

What if energy prices rise again?

The new scheme may leave businesses more vulnerable to price rises. Currently, if prices rise above the capped amount, the state pays the difference. When the new scheme is implemented if price rises occur the government will only implement the £6.97 and £19.61 discounts for gas and electricity respectively.

This new support package totals £5.5 billion spanning 12 months from April this year.

Does the relief apply to the UK and Northern Ireland?

Yes, relief has been given to non-domestic energy users in Great Britain and Northern Ireland although there are slight difference in the NI support. Further details can be found here.

Read the government’s full statement here.

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