Energy Bills Discount Scheme

On Monday 9th January 2023 the Government announced future plans for the Energy Bill Relief Scheme (EBRS) which provides a discount for non-domestic customers energy usage between 1 October 2022 and 31 March 2023.

The new scheme, the Energy Bills Discount Scheme (EBDS), which was announced yesterday, will run for 12 months from 1 April 2023 to 31 March 2024. 

More information on the new scheme can be found in the following Government resources...

• Guidance Notes
• Fact Sheet
• List of sectors eligible for the Energy and Trade Intensive Industries (“ETII”) scheme (PDF)

The EBDS scheme will start from 1st April.

The below information is an overview of this new scheme as provided by Government….

The amount your bills will be reduced

As per the current scheme the government will provide a discount on your gas and electricity unit prices. Eligible non-domestic consumers will now receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:

Under the new scheme the government will continue to provide a discount on companies’ gas and electricity unit prices.

Eligible non-domestic consumers will now receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024, subject to a maximum discount. The relative discount will be applied if wholesale prices are above a certain price threshold. For most non-domestic energy users in Great Britain and Northern Ireland these maximum discounts have been set at:

• electricity - £19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
• gas - £6.97 per MWh with a price threshold of £107 per MWh

The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.

Recognising that some non-domestic energy users in Great Britain and Northern Ireland are particularly vulnerable to high energy prices due to their energy intensive and trade exposure, (referred to as Energy and Trade Intensive Industries or ETIIs), these sectors will receive a higher level of support, subject to a maximum discount. The maximum discounts and price threshold for these sectors are:

• electricity - £89 per MWh with a price threshold of £185 per MWh
• gas - £40 per MWh with a price threshold of £99 per MWh

For a full list of businesses in scope, see the List of sectors eligible for the Energy and Trade Intensive Industries (“ETII”) scheme (PDF, 66.2 KB, 4 pages).

How it works

Applying the reduction

As with the original scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

Eligible ETII customers will have to apply for the higher level of support. Further details on how this will work will be published in due course. If you think your supplier is not applying the discount correctly, you should contact your supplier in the first instance.

The government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that they are passing on to non-domestic customers.

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Additional Notes....

The full list of sectors in scope of the Energy and Trade Intensive Industries (“ETII”) scheme can be found HERE.

The most relevant sectors for the plastics industry covered under ETII are below...

• 20.16 Manufacture of plastics in primary forms
• 22.21 Manufacture of plastic plates, sheets, tubes and profiles
• 22.22 Manufacture of plastic packing goods
• 22.23 Manufacture of builders’ ware of plastic
• 22.29 Manufacture of other plastic products

A more detailed description of each SIC code, including inclusions and exclusions, is available here

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Under the current Energy Bill Relief Scheme (EBRS) scheme (which ends on the 31st March 2023) for energy users in Great Britain and Northern Ireland the government supported price was set at:

• electricity - £211 per megawatt hour (MWh) / 21.1p per kilowatt hour (KWh)
• gas - £75 per MWh / 7.5p per KWh

 

An oveview of the scheme provided by LG Energy can be downloaded HERE