Business Energy Bill Relief Scheme
The government support package caps wholesale prices at £211 per megawatt-hour (MWh) and £75 MWh for gas.
September 2022
| Breaking News
Financial support has been cut and replaced with a new scheme offering discounts on wholesale energy prices rather than a fixed cap. The Energy Bill Discount Scheme (EBDS) will typically only be available when wholesale costs are high.
Not all businesses will be offered the same discount level, with large consumption industries receiving a more significant discount. Here are the businesses eligible for discount:
Eligibility is dependent on:
This new scheme will begin in April 2023 and run until March 2024.
The Energy Bill Discount Scheme (EBDS) is applied directly to wholesale unit prices. This will automatically be applied before you receive your business energy bill for 12 months. The discount is relative to wholesale prices above a certain price.
The discount will be calculated based on the difference between wholesale energy prices with an energy contract and the government-backed price.
Energy-intensive industries will receive higher discounts:
Who are the energy-intensive businesses?
Eligible energy-intensive businesses will have to apply for higher energy discounts. All other businesses will receive the standard discount automatically.
The relative discount will be applied if wholesale prices are above a certain price threshold. The scheme means discounts will be phased in when wholesale energy prices exceed the floor price until the total discount reach the maximum cap. This means energy prices can still fluctuate and securing a fixed-rate deal at the right price will help maximise savings.
As the discount will be variable based on the type of contract and wholesale energy prices. This can make it difficult for small business owners to understand exactly what discount they can expect. Here are a few examples of how the energy bill discount will work:
A pub
Annual Gas Usage (kWh) |
Annual Electricity Usage (kWh) |
Estimated Annual Discount |
192,000 kWh |
48,000 kWh |
£2,279.52 |
Small retail shop
Annual Gas Usage (kWh) |
Annual Electricity Usage (kWh) |
Estimated Annual Discount |
24,000 kWh |
12,000 kWh |
£402.60 |
Medium-sized manufacturing business
Annual Gas Usage (kWh) |
Annual Electricity Usage (kWh) |
Estimated Annual Discount |
1,600,000 kWh |
200,000 kWh |
£687,120 |
*1 MWh = 1,000 kWh
Source: GOV.UK
The cost of the Energy Bill Relief Scheme ending in March is unsustainably expensive, according to Chancellor Jeremy Hunt. Even with wholesale energy prices lower than before the Russian invasion, they are still much higher than the long-term average.
The good news is that wholesale energy prices have been trending downward due to a mild European winter.
Yes. The business energy switching market is open for business. With prices still fluctuating, many business owners are choosing a fixed-rate deal for peace of mind and to maximise the discount placed on wholesale prices.
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The government support package caps wholesale prices at £211 per megawatt-hour (MWh) and £75 MWh for gas.
September 2022