What is the Energy Bills Discount Scheme?
Definition of Energy Bills Discount Scheme
The Energy Bills Discount Scheme is a UK government initiative to support non-domestic energy customers with their energy bills. Under the scheme, the government will provide a per-unit discount on wholesale energy prices between 1st April 2023 and 31st March 2024. The scheme is subject to a maximum discount and applies only if energy prices are above a certain threshold.
The Energy Bills Discount Scheme has replaced the Energy Bill Relief Scheme, which applied between 1st October 2022 and 31st March 2023.
Who is eligible for the scheme?
The baseline discount is available to anyone in Great Britain and Northern Ireland who has a non-domestic energy supply contract with a licensed energy supplier. This includes businesses, voluntary organisations such as charities and public sector organisations such as schools and hospitals.
The scheme also provides separate discounts for Energy and Trade Intensive Industries (ETII) and Heat Networks.
What are the discounts and thresholds?
Eligible non-domestic customers will see a reduction of up to £6.97/MWh applied to their gas bill, and a reduction of up to £19.61/MWh applied to their electricity bill.
The discount will only apply when the contract’s wholesale price exceeds the scheme’s threshold price, which is set at £107/MWh for gas and £302/MWh for electricity. The discount is calculated as the difference between the contract’s wholesale price and the threshold price. It will be phased in when the contract’s wholesale price exceeds the threshold price until the total discount per MWh reaches the maximum discount for that fuel.
If a business is already paying less than these threshold prices for energy, it won't be eligible for the discount, and the government has advised that: “Most non-domestic customers will not see additional support on their energy bills.”
How to get the relief
As with the previous scheme, businesses do not need to apply for the discount. Suppliers will automatically apply reductions to the bills of eligible customers.