What does the energy discount mean for you?

Article posted

13th Jan 2023

Read time

5-9 min read


Mollie Pinnington

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On the 10th of January, the government announced to businesses what they can expect in terms of energy support when the current Energy Bill Relief Scheme comes to an end.

Since October businesses have had support with their energy bills under the Energy Bill Relief Scheme (EBRS). This has provided a cap on wholesale prices for gas and electricity.

The government have recognised that although businesses have been struggling, the current level of support is unsustainable. The current support package runs from October 2022 to the end of March 2023 and is already expected to cost around £18Bn.

However, given this businesses are still struggling with energy bills despite support due to such high prices. Therefore, the government is extending support to help businesses transition into a higher-price environment.


The Energy Bill Discount Scheme

The new support businesses can expect from 1st April 2023 is going to be the Energy Bill Discount Scheme (EBDS). This applies a discount on the wholesale element of business energy bills.

There will no longer be any price caps like there were with the EBRS ad there is far less protection for non-domestic energy customs with the new support. Like the EBRS this no support will only apply to those that signed their contracts after 1st December 2021.

The EBDS will also only be applied to energy contracts once they have gone over a certain price which is outlined below:

·         For electricity if the wholesale portion of the bill rises over 30.2p/kWh then a maximum of 1.96p/kWh discount.

·         For gas if the wholesale price rises over 10.7p/kWh then a maximum discount of 0.697p/kWh will be applied.

·         The new support will be automatically applied to the bills of all eligible non-domestic customers.

The government have recognised that there are many businesses in the UK that are more vulnerable to higher energy prices due to their energy intensive and trade exposure. These businesses are usually referred to as Energy and Trade Intensive Industries or (ETIIs).

To make sure these industries are not too damaged by market increases they will receive a higher level of support. The maximum discount and price threshold for these sectors are:

·         electricity - £89/ MWh with a price threshold of £185/MWh

·         gas - £40/MWh with a price threshold of £99/ MWh

 Check whether your business could be eligible for the ETII scheme here.

This new support will run from April 1st 2023 to March 31st 2024 and is expected to cost the government around £5.5Bn. The new support will be automatically applied to the bills of all eligible non-domestic customers. You do not have to sign up or sign anything to receive this support. Be careful of energy scams that might tell you otherwise.

If you are eligible for the ETII then you will have to apply for this support. However, the government have not released how this will work just yet. Make sure to read the guidance from the government website before doing this.


What does this mean for your business?

Businesses have already been struggling with energy bills despite the current relief scheme. Due to this energy discount being much lower, many businesses are going to find it difficult when it comes to paying energy bills this year.

The government have said that this new discount was intended to allow businesses to transition to a higher price energy market.

Due to the lack of support, your business will be getting you are now going to be more at risk of suffering from shifts in the market. This also puts pressure back on businesses when it comes to energy bills.

Also, if the price of wholesale energy is below the threshold prices, there is no support.

This means that your business is now going to have to proactively think about ways in which you can manage the risks of price rises.   


What can we do to help

As we mentioned above businesses are going to have to become a lot more proactive when it comes to dealing with energy bills.

To make sure you are getting the best contract for your energy renewal we would suggest that you ensure that you begin thinking about comparing energy suppliers and prices as early as possible.

If you would like to speak to an energy consultant today to find the best prices and contracts for your business, then get in touch today. If your energy contract is coming to an end, then why not get a free quote today?


If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.

Looking to pay less on your energy bills?

Get a free quote today