Since the government announced the inception of the Energy Bill Relief Scheme (EBRS) in October 2022, NFU Energy has been monitoring its application and developments closely. The scheme from the get-go was advertised as a “temporary” measure that would run until March 31st 2023 and there was much curiosity about what would succeed the EBRS. Last night, following the promised review, the successor to the EBRS was announced by government and from April 1st 2023, the Energy Bill Discount Scheme (EBDS) will be in effect for an initial period of 12 months.
Whereas the EBRS included a fixed price cap for some users, the new EBDS only provides a discount on the per-unit prices of Gas and Electricity. The discounts come into effect when wholesale prices are above defined thresholds as per the below structure:
- Electricity – discount of £19.61/MWh above a price threshold of £302/MWh.
- Gas – discount of £6.97/MWh above a price threshold of £107/MWh*†
The discounts above apply to the vast majority of business users, however it is worth noting that the EBDS provides greater support for businesses classed as Energy and Trade Intensive Industries (ETIIs), shown below. Whilst agriculture has not been deemed an eligible ETII for this scheme, some associated processing business such as dairies and businesses that manufacture agricultural inputs such as fertilisers are eligible for greater support . The full list of those industries that have is available here. ETII Discounts:
- Electricity - £89/MWh with a price threshold of £185/MWh
- Gas - £40/MWh with a price threshold of £99/MWh†
†The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel.
For those operating CHPs there has been no further update from the government in regard to the structure of relief and we infer at this time that existing rules (reduced support for those generating and exporting electricity at >5MWe capacity) will continue. Should there be any change to this we will let you know.
To read the government guidance for the Energy Bills Discount Scheme in full see: GOV.UK | Energy Bills Discount Scheme
The NFU has also published a full article on what the EBDS means for your business.
Here, the NFU provides details of the lobbying work they have been doing for agriculture throughout the energy crisis.
*The 6-month EBRS wholesale energy price cap in place from 01 October 2022 to 31 March 2023 has been capped at £211 per MWh (21.1p/kWh) for electricity and £75 per MWh (7.5p/kWh) for gas.