What are the changes to the Energy Bill Relief Scheme?
The current Energy Bill relief scheme, which was announced in September 2022, is coming to an end in March 2023. It was introduced to support businesses, charities, and public sector organisations by providing them with a discount on wholesale gas and electricity prices. It didn’t require an application; it was automatically applied to all non-domestic consumers. Lasting for 6 months its estimated to cost the government £18.4bn. Although this is coming to an end on the 31st of March, it is going to be replaced by the Energy Bills Discount Scheme and Energy Bills Discount Scheme for ETIIs on the 1st of April 2023, which will run until the 31st of March 2024.
Energy Bills Discount Scheme The Energy Bills Discount Scheme will replace the Energy Bill Relief Scheme on the 1st of April 2023, this scheme will run for 12 months and is estimated to cost the government £2.2bn. Unlike the EBRS, the EBDS will be a discount on unit rates above the wholesale price threshold. Whereas the EBRS was a cap on wholesale unit rates via a ‘government supported price’. This new scheme was announced on the 9th of January 2023 ahead of the imminent end of the EBRS, which many non-domestic customers facing significantly inflated gas and electricity prices in light of global price pressures. The latest data shows that wholesale gas prices have now fallen to levels just before Putin’s invasion of Ukraine. The discount will be available to those:
- On existing fixed price contracts that were agreed on or after 1st December 2021
- Signing new fixed-price contracts
- On deemed/out of contract or standard variable tariffs
- On flexible purchase or similar contracts
- On contracts paying energy costs above a price threshold
- On variable ‘Day Ahead Index’ tariffs (Northern Ireland Scheme)
You don’t need to apply for this scheme, it will be automatic for all non-domestic consumers. Consumers will receive a discount of up to £6.97/MWh unit discount on their gas bill and a unit discount of up to £19.61MWh on their electricity bill.
Energy Bills Discount Scheme for ETIIsBusinesses in the energy and trade-intensive industries are less able to pass the higher costs on to their customers. To be eligible; businesses must receive their energy from a licensed supplier and pay more than the price threshold. Unlike the EBDS, eligible consumers will need to apply for the additional support, it won’t be automatically applied. The EBDS for ETIIs is estimated to cost the government £3.3bn, the support will be available for a duration of 12 months – ending on the 31st of March 2024. This discount will only apply to 70% of energy volumes and will be subject to a maximum discount of £40.0/MWh for gas and £89.1/MWh for electricity.
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Please note: This article is provided for information only and was correct as at time of writing (23/02/23). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.
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