Energy Bills Discount Scheme: What to look out for

The Energy Bill Relief Scheme was put in place to support businesses by providing a discount on their gas and electricity unit price. The Government advice states that: “This discount is worked out by taking the estimated wholesale portion of the unit price you would be paying compared to a baseline ‘government supported price’.” This set price is significantly lower than what was expected for the wholesale prices over the winter period. This was separate to the Energy Bills Support Scheme, which entitled households to capped prices as energy suppliers increased their prices.

Back in January, the Government announced they would be changing the scheme to a new Energy Bills Discount Scheme from April 2023 to April 2024. This new scheme has reduced the amount of discount that eligible non-domestic customers will see. Instead of a capped price, you’ll see a discount on wholesale prices.

Your business won’t need to take any action to receive this energy bill support. The relevant reduction in price will be applied to bills automatically. Any non-domestic customers eligible for the support will only receive the discount when the wholesale prices surpass the new price threshold set by the Government and will be capped at a certain level of discount you will see on your electricity bill.

• For electricity: Businesses will receive a maximum discount of £19.61/MWh. This will apply when the wholesale price rises above £302/MWh.
• For gas: Businesses will receive a maximum discount of £6.97/MWh which will apply when the wholesale price rises above £107/MWh.

The eligibility criteria for the Energy Bills Discount Scheme is the same as the previous Energy Bill Relief Scheme. It’s available for everyone on a non-domestic contract, such as schools, charities and care homes, who are:

• On an existing fixed price contract agreed on before December 2021
• Signing a new fixed price contract
• On deemed/ out of contract/ or standard variable tariffs
• On flexible purchase or similar contracts

Some businesses are more vulnerable to high energy costs than others. Businesses that work in sectors that naturally have a higher level of consumption have some extra support put in place too. The government has outlined the extra level of support for Energy and Trade Intensive Industries as:

• For electricity: businesses will receive a maximum discount of £89/MWh once the wholesale prices goes above £185/MWh.
• For gas: Businesses will receive a maximum of £40/MWh which will apply when the wholesale price goes above £99/MWh.

Businesses operating in these industries will have to apply for the higher level of support, but the Government have not yet announced how you can apply for this. To find out whether your business is eligible for the extra support, click here to see the full list of industries included.