The Energy Bills Discount Scheme: Update With Heat Network Directions

The Energy Bills Discount Scheme, including Heat Network requirements effective 26th April 2023

The Energy Bills Discount Scheme (EBDS) replacement of the Energy Bill Relief Scheme (EBRS), effective 1st April 2023. It is designed to give all non-domestic customers, including the voluntary sector (such as charities) and the public sector (such as schools and hospitals) access to a phased in maximum discount when the customer’s wholesale cost exceeds the defined thresholds. This will last for 12 months until 31st March 2024 and will apply to contracts that were put in place on or after 1st December 2021 and non-contracted arrangements. Those organisations that are classed as Energy and Trade Intensive Industries (ETII) or have Heat Networks will receive a more attractive discount once applied for.

The capped wholesale discount costs will be:

• £19.61 per MWh for Electricity
• £6.97 per MWh for Gas

The thresholds:

• £302 per MWh for Electricity
• £107 per MWh for Gas

How does the Energy Bills Discount Scheme effect your business?

As with the EBRS, energy suppliers will automatically apply these standard discounts. Although the levels of assistance are lower and are based on a high wholesale cost, the price of Gas and Electricity has fallen recently. There will be less exposure to high costs, which had been a significant concern before these schemes were implemented in October 2022.

Requirements for Heat Networks effective 26th April 2023

In order to provide domestic customers that obtain their heat and hot water through a Heat Network via a commercial energy contract, with the comparable benefits seen by other domestic consumers through the Energy Price Guarantee, a Minimum Supply Price (MSP) has been introduced for both Gas and Electricity. The scheme supports the Wholesale element until the MSP is achieved:

• £340 per MWh for Electricity
• £78.3 per MWh for Gas

There is an obligation for Heat Networks that provide to one or more domestic customers to register, to ensure that their residents receive potential benefits, now or at some other time. Only meters that directly provide the heat should be submitted.

This scheme was introduced on the 26th April 2023 and requires submissions to be made within 90 days by using the EBDS Application Portal. Energy suppliers will automatically be informed of the application and who in turn will contact the customer to confirm receipt. At this stage they may potentially ask for details of percentage splits where energy is not solely used for the Heat Network.

Further guidance can be found by using the following link, which includes the application process.  

Apply for the Energy Bills Discount Scheme heat network support – GOV.UK (www.gov.uk)

What happens after the 12 months?

The excessive cost of these schemes and the falling cost of Wholesale prices may mean assistance is no longer possible or required. It is impossible to know what will happen in the energy markets during this period and although it is unlikely we will see a return to what had been regarded as normal pricing, there is the hope that rates will continue to fall.

What if you can’t afford to pay your business energy bills?

If you are struggling to pay your energy bills, it’s important you speak to your trusted energy consultancy or supplier as soon as possible. You may be able to put in place a repayment plan. Missed payments can result in disconnection cutting off your energy supply and additional penalty charges. Please get in touch with us if you need to discuss this further.

What can I do to reduce my bills?

Although you can’t completely control energy costs, there are some simple steps you can take to reduce your consumption to help keep bills down. For example, making sure employees turn off lights when they leave at the end of the day and only boiling the amount of water, they need to make a cup of tea. They may seem like small steps, but they can have a big impact on your bills.

Check out our recent energy saving advice blog for some more tips!

Link to ETII: 230104_ETII_List_for_gov.uk.pdf (publishing.service.gov.uk)

Link to EBDS: https://www.gov.uk/guidance/energy-bills-discount-scheme

If you enjoyed reading this blog, why not try one of our others:

• Indigo Swan shortlisted for 11 TELCA Awards

• Sustainable Food

• Information on the Energy Bills Support Scheme