Eligibility and how will it work;
- Starts on 1st April 2023 and the discount runs for 12 months until 31st March 2024
- Applies to ALL businesses, charities/voluntary organisations and public sector
- For anyone who is in a contract that was agreed after 1st Dec 2021 including flex contracts or is on a standard variable/out of contract rate.
- The discount differs between standard businesses and Energy Intensive Industries (EIIs)
- The energy suppliers will credit their customer’s bills with the associated discount if the business qualifies for the discount
- The government investment is estimated at £5.5 billion for 12 months compared to the price cap which was estimated at £18.5 billion over 6 months.
The discount that is applicable;
Standard Businesses
- The gas discount is applicable if the business is paying 10.7p/kWh for their wholesale cost of gas (this excludes non energy costs)
- The power discount is applicable if the business is paying 30.2p/kWh for their wholesale cost of power (this excludes non energy costs)
- If the gas threshold has been reached then the business will get 0.697p/kWh knocked off their unit rate
- If the power threshold has been reached then the business will get 1.961p/kWh knocked off their unit rate
The discount that is applicable;
Energy Intensive Industries
- The gas discount is applicable if the business is paying 9.9p/kWh for their wholesale cost of gas (this excludes non energy costs)
- The power discount is applicable if the business is paying 18.5p/kWh for their wholesale cost of power (this excludes non energy costs)
- If the gas threshold has been reached then the business will get 4p/kWh knocked off their unit rate
- If the power threshold has been reached then the business will get 8.9p/kWh knocked off their unit rate
- This discount will apply to only 70% of energy volumes and the final 30% will have no discount applied. When this is pro rata across the whole volume the full volume discount for gas reduces to 2.8p/kwh and 6.23/kwh for power.
- To see if you qualify as an EII please check here – List of Energy Intensive Industries
Summary
- For the majority of businesses energy prices will go up from April 23
- The prices shown do NOT include non energy costs such as renewable taxes (RO, FiT) and grid charges (DUoS and TNUoS). This will add another 0.5p/kWh onto the gas price and also 7-8p/kWh onto the power charge.
- Energy prices are starting to drop due to a fair amount of gas in storage across Europe due to a mild Winter so far and less demand for gas from the far East. This could reverse quickly dependent on weather and the economic situation – current prices are very sensitive to changes. This does not impact the majority of businesses who are locked into fixed term contracts.
- Focussing on areas such as energy efficiency (using less) and energy generation (creating your own energy) is now absolutely vital for businesses to reduce the risk of being dependent on the wholesale price of gas and power.
- For the Government announcement please click here Government EBDS Announcement
For further help and advice on the Energy Bill Discount Scheme get in touch with us:
Phone: +44 (0)161 660 2222
Email: solutions@ylemenergy.co.uk
