On Monday evening, the Chancellor announced the new Energy Bills Discount Scheme (EBDS) to support businesses with their energy bills. The EBDS will run from 1 April 2023, when the current Energy Bill Relief Scheme (EBRS) ends, until 31 March 2024.
Support available under the EBDS is more limited than under EBRS. A £5.5 billion cap has been set for EBDS, based on estimated volumes.
Eligible non-domestic energy customers will now receive a unit discount of up to £6.97/MWh to their gas bill and a unit discount of up to £19.61MWh to their electricity bill during the 12-month period between 1 April 2023 to 31 March 2024, above a threshold level of £107MWh for gas and £302MWh for electricity.
This differs from the original Energy Bill Relief Scheme where bills were capped at £211 per megawatt hour (MWh) / 21.1p per kilowatt hour (KWh) for electricity and £75 per MWh / 7.5p per KWh for gas. Not only will this mean a sizeable increase for each tariff, but unlike the original scheme, prices will now be open-ended rather than capped.
As with EBRS, you do not need to apply for EBDS – support will automatically be applied to bills by your supplier.
The EBDS discounts will be available to those:
- 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 contracts paying energy costs above a price threshold;
- On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)
MIA Executive Director Anthony Short commented:
“Whilst it was inevitable that the scale of Government support would be reduced, what has been announced will mean businesses will face a considerable energy price shock before we get to the summer months.
The fact that we are talking about a discount rather than a cap will reduce the amount of certainty that MIA members will have with regard to future bills and it is a little disappointing that support is being cut so dramatically at a time when the expectation is that energy costs are going to remain higher for longer than initially forecast.
We would call on the Government to look again at this support, as we are concerned that a great many of our members will be severely impacted.”