Energy bills support continues – at reduced rates
The Government yesterday published its plans for the end of the Energy Bill Relief Scheme (EBRS) for businesses which comes to an end on 31 March.
The EBRS will be replaced by an Energy Bill Discount Scheme (EBDS) which will run from 1 April 2023 until 31 March 2024.
Businesses which have been receiving help under the EBRS will be eligible for the EBDS and will not have to take any action - discounts will continue to be applied to energy bills automatically.
However, the new rates of support are lower than under the current EBRS scheme.
How the Energy Bill Discount Scheme will work
The new scheme applies a discount if wholesale prices are above a certain price threshold. The wholesale price thresholds are £302 per MWh for electricity and £107 per MWh for gas. The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discounts will be subject to a maximum of £19.61 per MWh for electricity and £6.97 per MWh for gas.
It's not clear yet how the discount will be applied and therefore how much companies can expect to save on their energy bills, or how this will compare to the current scheme.
Extra help for Energy and Trade Intensive Industries
A higher level of support, subject to maximum discount, is available for companies who are classed as Energy and Trade Intensive Industries or ETIIs. The full list of businesses in scope can be viewed here.
The maximum discounts and price threshold for these sectors are:
- electricity - £89 per MWh with a price threshold of £185 per MWh
- gas - £40 per MWh with a price threshold of £99 per MWh
The following SIC codes relevant to our industry are on this list:
- 17.23 Manufacture of paper stationery
- 22.19 Manufacturer of other rubber products (other = not tyres)
- 22.22 Manufacture of plastic packing goods
- 22.29 Manufacture of other plastic products
- 14.12 Manufacture of workwear
- 17.12 Manufacture of paper and paperboard
- 17.22 Manufacture of household and sanitary goods and of toilet requisites
A company can be registered with up to four SIC codes. Check your activity and ensure that you are registered under the correct SIC code(s) for what you do.
Those eligible for the ETII level of discount will need to apply; more information on how to do so has been promised from Government ahead of April.
Next steps
We have a number of questions about the Scheme, including how the discounts will be applied and how businesses apply for the ETII level.
We are meeting with the Department for Business, Energy & Industrial Strategy tomorrow morning (10 January) so please send your initial questions and comments today to carys@bossfederation.co.uk copying in amy@bossfederation.co.uk.
We will publish more information as and when we receive it from Government, and there will be further opportunity to let us know how impactful you think this Scheme will be.
More energy help
For more help with energy costs, start your journey on our Environmental Roadmap.
Through our partner BPIF we have teamed up with energy broker Inenco who will do their best to find the best deals for you. They've also published a series of helpful papers including ‘Understanding Business Energy for SMEs' and ‘Top Energy Efficiency Tips'.
Amy Hutchinson, CEO of BOSS, comments:
"BOSS have pushed hard on behalf of the industry to see support remain beyond March. It's encouraging it will be in place for a further year but it's disappointing the levels have been reduced. We will be keeping abreast of what information those eligible for the ETII level of discount will need to apply and would like to hear from companies about the impact the reduction in support will have on their businesses so we can ensure we feed this back to Government."
