The Energy Bill Discount Scheme (EBDS)
The government introduced a new energy support scheme called the Energy Bill Discount Scheme (EBDS). The scheme runs from 1st April 2023 until the end of March 2024.
The scheme is made up of three parts:
- The baseline discount provides some support with energy bills for eligible non-domestic customers
- The Energy and Trade Intensive Industries (ETII) discount provides a higher level of support to businesses and organisations in eligible sectors who are vulnerable rising costs– you need to apply for this support
- The Heat Network discount provides a higher level of support to heat networks with domestic end consumers – you need to apply for this support
As a customer of F&S Energy, we are required to provide a discount to electricity unit rates according to the rules laid out in The Energy Prices Act 2022.
1. The baseline discount
If you are on a fixed price contract the discount will be up to 1.961 p/kWh if the wholesale price was greater than the threshold 30.2p/kWh when your electricity supply contract was agreed.
The discount is only applied to the wholesale element of the bill and therefore the final per unit price paid by non-domestic customers will differ as it includes other costs such as network charges and operating costs.
The scheme will be available to customers on a non-domestic electricity contract who are:
- On fixed price contracts that were agreed on or after 1 December 2021
- New Fixed Contracts
- Out of Contract or Deemed Contracts (Variable Price Contract)
- Flexible Contracts
The baseline discount will be applied automatically to your invoices. Please be weary of claims or scams by third parties that request your bank details.
Detailed guidance on the scheme can be found on the gov.uk website
https://www.gov.uk/guidance/energy-bills-discount-scheme
2. The Energy and Trade Intensive Industries (ETII) discount
Energy and Trade Intensive Industries (ETII) such as glass, ceramics and steelmakers can apply to get a higher discount as part of the ETII scheme as they are vulnerable to rising energy costs. Organisations will still automatically receive the baseline discount.
An organisation is considered eligible for ETII support if at least 50% of its revenue is generated from UK-based activity within eligible Standard Industrial Classification (SIC) code sectors.
Additionally, an organisation must have a non-domestic contract and be:
- 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 variable tariffs
- on flexible purchase (or similar) contracts
Organisations will receive a discount reflecting the difference between the price threshold and the relevant wholesale price. The thresholds are:
- Electricity - 18.5 per kWh
This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of 8.9 p/kWh for electricity. The baseline level of support will apply for the remaining 30% of energy volumes where the customers wholesale price meets the baseline eligibility criteria. The discount is likely to show up as one line on your bill as suppliers will do one calculation for the overall discount you are owed.
For local authorities, eligibility may be determined at a premise level. Where there are no relevant financial accounts, the local authority will be required to declare that at least 50% of the space within that premise is taken up by operations within eligible sectors.
Eligible organisations will have 90 days from the scheme introduction date of 26 April 2023 to apply for the higher support. New organisations or newly eligible organisations will have 90 days to apply from the date at which they become eligible.
A list of eligible sectors and the scheme application link on the government’s website at www.gov.uk/guidance/energy-bills-discount-scheme-energy-and-trade-intensive-industries-support
3. The Heat Network discount
As non-domestic customers, all eligible heat networks will receive at least the baseline level of support under the EBDS. A higher level of support is available to heat networks with domestic end consumers.
Heat suppliers will be eligible for the higher level of support if their heat network:
- supplies heating or hot water to a building or persons in that building
- is supplied by a licensed supplier
- supplies one or more domestic customers
- uses gas or electricity for producing heat
All meter points that supply energy to generate heating or hot water and distribute that heating or hot water to consumers through the heat networks are eligible for support. Meter points that do not supply energy for the heat network are not eligible for support and should not be provided during the application process.
Heat suppliers with multiple networks will need to submit a separate application for each eligible network.
Eligible organisations will have 90 days from the scheme introduction date of 26 April to submit an application for the higher support. If a heat network they supply becomes eligible after the scheme introduction date they will have 90 days to apply from the date that heat network becomes eligible.
The scheme aims to bring retail energy prices paid by heat suppliers down to a target heat network Minimum Supply Price through reductions in the wholesale element of the bill. This means there are no maximum discounts or wholesale price thresholds for heat networks. This is different to the approach taken for other parts of the Energy Bill Discount Scheme or the Energy Bill Relief Scheme.
The scheme will support the wholesale element of a heat network’s energy tariff, up to the point that the Minimum Supply Price is achieved. The Minimum Supply Prices will be set as:
- Electricity – 34.0 p/kWh
After their application for the scheme has been approved, heat suppliers will receive the new discount rate from their energy suppliers. They will then need to pass this discount on to their consumers.
This should ensure that domestic customers on heat networks do not face disproportionately higher heat and hot water bills when compared to customers in equivalent households who are supported by the Energy Price Guarantee (EPG).
A detailed view, and the scheme application link can be found on the government’s website at https://www.gov.uk/guidance/energy-bills-discount-scheme-heat-networks-support
