The government’s new Energy Bills Discount scheme is aimed at assisting energy intensive sectors with current high costs associated with electricity and gas.
The Energy Bills Discount Scheme (EBDS), that is set to begin at the end of March this year and run for 12 months, replaces the current Energy Bill Relief Scheme (EBRS) which will close March 31st 2023.
Details of the new scheme were provided after pressure from businesses currently reliant on the EBRS that were seeking assurances about what would happen when the scheme, which began in October 2022, ended.
Robert Sheasby, chief executive of AIC, says, “We welcome the government’s announcement of continued support for agri-supply businesses with the high cost of energy. Our members need certainty to plan and advise their customers, and many have a significant draw on energy after March.”
The new Scheme is a two-tiered system with eligible UK businesses and non-domestic energy users in the most energy intensive sectors entitled to “substantially higher level of support” than the previous scheme afforded.
This includes businesses that manufacturer fertilisers, pesticides, oils and fats, nitrogen compounds, animal feed (prepared), sugar, malt and grain mill products as well as meat and poultry preservers, dairy operators, and cheese makers.
The gap between price threshold and relevant wholesale price will be reflected in the discount offered to these businesses, with the price threshold for this sector announced as £99/MWh for gas and £185/MWh for electricity.
The discount will be subject to a maximum discount of £40.0/MWh for gas and £89.1/MWh for electricity and will apply to 70% of energy volumes only.
The other non-domestic customers who meet the eligibility criteria, and who have a valid contract with an energy supplier, will see a wholesale price threshold of £107/MWh for gas and £302/MWh for electricity, with costs below this level not eligible for support.
These businesses will receive a discount of a maximum of £6.97/MWh for gas and £19.61/MWh for electricity.
The discounts will be applied by the energy suppliers and businesses do not need to apply for the scheme.
Mr Sheasby concluded, saying, “This support will assist businesses in managing volatile energy prices and recognises the important part that the agri-supply industry plays in the food supply chain.”