The Energy Bills Discount Scheme (EBDS) and Energy and Trade Intensive Industries (ETII) scheme Key Facts…
EBDS:
EBDS replaces the Energy Bill Relief Scheme (EBRS) and will run from 01/04/2023 to 31/03/2024. Energy customers with a non-domestic contract such as a business, public sector organisation or charity will be eligible. Financial support will be significantly less than under the EBRS.
Customers that have agreed a contract when the wholesale electricity price is above a threshold of £302/MWh (30.2p/kWh), or the wholesale gas price is above a threshold of £107/MWh ( 10.7p/kWh), will be eligible for a discount above those levels up to a maximum of £19.61/MWh (1.961p/kWh), for electricity and £6.97/MWh (0.697p/kWh), for gas. The Government publishes weekly wholesale commodity costs here. It is worth pointing out, that with most common types of energy contract, the unit rate will not be a pure commodity cost, it will be a blend of both commodity and non-commodity costs. If you have a pass through or flexible style contract, the unit rate may be a pure commodity cost. Check your contract details for these specifics, or contact Direct Power Associates Ltd. if you need assistance determining the commodity cost associated with your supply contract.
Qualification criteria EBDS:
- Commodity cost of contract must be greater than commodity price thresholds £302/MWh (30.2p/kWh) for electricity, or £107/MWh ( 10.7p/kWh) for gas.
- Fixed contract agreed on or after 01/12/2021.
- On a Deemed, Variable, Out of Contract.
- On a Flexible Supply contract.
Observations EBDS:
At the time of publishing, market prices fall below the commodity price thresholds, i.e. contracts secured now will be priced low enough not to receive a discount. EBDS will be applied automatically at point of billing, qualifying customers do not need to take any action to receive the discount.
Energy Trade Intensive Industries (ETII) Scheme:
There is an additional level of discount available to organisations that qualify as Energy and Trade Intensive Industries or ETIIs. A full list of sectors eligible for the ETII scheme is published by BEIS here.
Qualification criteria ETII:
You must have a non-domestic contract with a licensed energy supplier 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.
- On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only).
- Your UK business or organisation should also be able to prove that at least 50% of its revenue is being generated from UK-based activity within one of the eligible SIC code sectors.
ETII Organisations will receive a discount reflecting the difference between the price threshold and the relevant wholesale price. The thresholds are:
- Electricity – £185/MWh (18.5p/kWh)
- Gas – £99/MWh (9.9p/kWh)
This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £89/MWh (8.9p/kWh) for electricity and £40.0/MWh (4.0p/kWh) for gas. The baseline level of support for EBDS 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.
Observations ETII:
At the time of publishing, market prices fall below the commodity price thresholds for the additional ETII discount. ETII discount requires application, this discount is NOT applied automatically. At the time of publishing BEIS have yet to announce the application instructions for the ETII discount, these are expected to be issued in early April, you can sign up to receive e-mail instructions as details are announced. Eligible organisations will have 90 days from when they become eligible to apply for the higher support. For a majority, this will mean they have 90 days to apply from scheme opening. You have to continue to pay your bills as normal whilst applying for the ETII discount, the suppliers will arrange credits as required.
If you anticipate qualifying for the ETII discount, prepare by:
- Registering to receive updates on the scheme.
- Collate your organisation’s contract details and meter details.
- Ensure your organisation’s SIC code is accurate on Companies House.
- For ETII customers on flexible or variable contracts, even if the current commodity rates fall below the threshold for ETII discounts, and you haven’t yet purchased all the volume through 31/03/24, you should consider applying for the ETII discount, so as to future proof against prices breaching the ETII threshold between 01/04/23 and 31/03/24.
- Energy suppliers will not be able to apply the ETII discount rate until eligibility has been confirmed by the Department for Energy Security and Net Zero.
Get in touch with Direct Power today for assistance with your EBDS or ETII discounts. It will help us, if you can confirm the date your energy contract was secured, and provide us with a copy of your contract, meter numbers, SIC code to hand when you get in touch.
