BMF issues advice on Energy Bill Discount Scheme

Following the Chancellor of the Exchequer’s announcement regarding changes to government support for business energy costs from 1 April 2023, the BMF is advising members to check whether they should apply for the higher level of financial assistance available to energy-intensive industries.

The UK-wide Energy Bill Discount Scheme (EBDS), which replaces the current Energy Bill Relief Scheme, is set to provide a discount on energy prices, rather than the existing arrangement which caps energy prices.

Most businesses will find that their energy supplier will automatically apply the standard discount to their bills.

However, there are slightly different proposals for energy-intensive industries, which include manufacturers of building materials, and they may need to register for this higher level of assistance.

BMF CEO, John Newcomb, said: “The overall package being offered by the government from 1 April is substantially below the level of support provided over the winter months.  This will be a major concern for energy-intensive manufacturers.  But they should also be aware that they may not automatically receive the proposed discount and may have to register to receive it. Details of how to do so have not yet been released, but we will be advising members as soon as they are available.”

The government’s proposals for the new EBDS scheme follow.

All Businesses 

For eligible customers who have a contract with a licensed energy supplier, the offer is:

• From 1 April 2023 to 31 March 2024, all businesses that 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 on 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 facing energy costs below this level will not receive support.

Energy-Intensive Industries

• Eligible businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.
• The price threshold 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.