The Government announced, on 9th January 2023, their update on the Energy Bill Relief Scheme (EBRS) and revealed the new ‘Energy Bills Discount Scheme’ (EBDS) to continue from the EBRS for UK Businesses, charities and public sectors from 1st April 2023.

The aims of the EBDS are to provide a discount on high energy costs to support those applicable while limiting taxpayers’ exposure to market volatility. Those within sectors with particularly high energy usage will receive more support. EBDS will provide applicable non-domestic customers with a discount on higher energy bills until 31st March 2024.

With the continued Government support in the form of the EBDS, non-domestic customers that signed utility contracts before the recent decreases in the market, please see weekly market insights, will still receive support and others will have the assurance against potential increases.

The previous support package via the EBRS provided £18 billion in relief for non-domestic customers, which is equivalent to around a 3p increase in people’s income tax. For more information on the EBRS, please see What is the Energy Bill Relief Scheme?

It has been made clear that this level of support was time-limited to allow for an adaptation to market conditions while being unprecedented and volatile. Wholesale prices have almost halved since the EBRS was announced and are at a 6-month low.

The EBDS is a balance between supporting businesses and limiting taxpayer exposure and is therefore limited to £5.5 billion over the next 12 months. This provides long-term security for non-domestic consumers and represents how the scale of market volatility has changed since September 2022.

From 1st April 2023 to 31st March 2024, non-domestic consumers on a licenced energy supplier contract will benefit from a discount of up to £6.97/MWh on gas and £19.61/MWh on electricity, unless they are below the wholesale price threshold. The thresholds have been increased from the EBRS to £107/MWh on gas and £302/MWh on electricity.

Non-domestic customers identified as being within a sector that is energy and trade-intensive, mainly manufacturing industries, will receive discounts based on a supported price and capped at a maximum discount of £40/MWh on gas and £89.1/MWh on electricity. The thresholds for energy and trade-intensive sectors will be £99/MWh on gas and £185/MWh on electricity.