The government has announced plans to switch out its Energy Bill Relief Scheme (EBRS) in favour of The Energy Bills Discount Scheme (EBDS). This isn’t just a change of name, however. In fact, the support for businesses facing high utility will likely reduce under the new scheme set to kick off on 1st April 2023.
So, in this blog, we’ll explore the new scheme, how it works and how you can closer examine your energy consumption to avoid skyrocketing utility bills over the next few years.
What is the Energy Bills Discount Scheme?
The EBDS is a 12-month package intended to provide “transitional” support for businesses facing increasingly expensive utility costs. In order to make the most of the scheme, and ensure your utility costs are kept to a manageable level, it’s important to take the time to understand both the EBDS as well as your overall business energy consumption.
The new scheme will see reduced support for businesses, charities and public sector organisations. In fact, under EBDS, support for gas and electricity will reduce from 9.1p/kwh and 34.5p/kwh to 0.697p/kwh and 1.961p/kwh, respectively. This is likely to mark the start of the end for Treasury-supported utility costs from next year, and as a result, businesses will need to take a close look at their energy costs at what is turning into a difficult time for many.
The scheme also promises a higher level of support for “energy-intensive” businesses, predominantly those in manufacturing industries. However, this does appear to be still less than the support currently provided.
The EBDS applies to organisations:
- On fixed-price contracts agreed on or after 1st December 2021
- On new fixed-price contracts
- Deemed “out of contract” or on standard variable tariffs
- On flexible purchase contacts or similar
- On variable “Day Ahead Index” (DAI) tariffs in Northern Ireland.
According to the government website:
“From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill.
This will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity. This means that businesses experiencing energy costs below this level will not receive support.
Customers do not need to apply for their discount. As with the current scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.”
For Energy and Trade Intensive Industries, the government adds:
“These businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
The price threshold for the scheme will be £99/MWh for gas and £185/MWh for electricity.
This discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89.1/MWh for electricity.”
How ESOS can help
Given the significant reduction in support for businesses, it’s critical that businesses take time now to assess their overall energy consumption.
Do not rely on unpredictable levels of government support to manage your energy costs, your ESOS process is a valuable tool.
The mandatory government energy assessment scheme is more than just a box to tick for 10,000 organisations nationwide, it’s the perfect opportunity to get an overview of your total energy consumption and identify areas of potential savings.
At Integral Energy, our national team of auditors and accredited Lead Assessors work with businesses to deliver ESOS, ensuring compliance with the scheme as well as supporting them to implement savings opportunities that reduce energy consumption and costs.
If you qualify for ESOS, you must declare your compliance to the Environment Agency on a rolling four-year cycle only after your programme has been been reviewed and approved by an ESOS Lead Assessor. We highly recommend appointing us to carry out the full assessment, as it reduces both time and ensures accuracy from the outset.
Want to learn more about ESOS or need support with a new or ongoing assessment? Speak to Integral Energy today.