From 26 April 2023, the government has launched their registration portal for businesses to apply for additional levels of support under the EBDS scheme. The portal will be open for businesses to submit their application within 90 days from 26 April 2023.

EBDS Outlined

As you may be aware, the Energy Bill Relief Scheme (EBRS), which supported businesses from October 2022 to March 2023, is being replaced with the Energy Bills Discount Scheme (EBDS) from the start of April 2023. This scheme aims to provide support to businesses from 1 April 2023 to 31 March 2024. Further details on the new EBDS Scheme can be found here.

The scheme comes with three bands of support to allow businesses within energy-intensive industries or heat networks to access a higher level of support for vulnerable industries.

The EBDS Baseline discount provides some support with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland.

• The EBDS baseline discount is notably lower than the previous EBRS discount.
• This support will be available to most business and is applied automatically.

The Energy and Trade Intensive Industries (ETII) discount provides a higher value of support to industries highly reliant on energy use.

• An organisation is considered eligible for ETII support if at least 50% of its revenue is generated from UK based activity within an eligible sector.
• A list of qualifying energy intensive industries can be found here.
• This support must be applied for via the EBDS portal.

The Heat Network discount provides a higher value support for heat networks with domestic end users.

• Most housing associations, charities & councils will fall in this category. More information can be found here.
• This support must be applied for via the EBDS portal.

EBDS Process

Organisations are expected to apply for any discount they may qualify for within 90 days from 26 April 2023 via the EBDS portal.

• Examples and information on the data required to make applications to the portal can be found here.
• Templates provided by BEIS to assist with applications can be found here.

Once an application has been submitted via the BEIS portal, the government will then assess eligibility and liaise directly with your supplier, who will then apply the discount at the point of billing.

We wanted to provide you with an update on the Energy Bills Discount Scheme (EBDS), which was announced earlier this year by the UK government. As you may know, EBDS is expected to replace the Energy Bill Relief Scheme (EBRS) from 1 April 2023 and will run for 12 months, where the new scheme is set to come into force on 26 April 2023.

We’ve listed more information about the update on EBDS and the Energy and Trade Intensive Industries (ETII) discount below.

What is the EBDS Scheme?

The EBDS is a scheme created by the UK government to provide discounts on energy bills for eligible non-domestic customers in Great Britain. Once the new legalisation has been approved, discounts will be applied from 1 April 2023. The scheme comprises three different parts:

1. Baseline Discount

This discount will provide eligible non-domestic customers with an energy discount automatically applied to invoices.

2. Energy and Trade Intensive Industries (ETII) Discount

This will provide a higher level of discount to businesses in qualifying sectors. Customers will need to register to receive this discount.

3. Heat Network Discount

This will offer a higher level of discount to heat networks with domestic end users. Customers will need to register to receive this discount.

Additional Support for ETII

The new scheme offers non-domestic customers operating primarily in sectors identified by the government as the most energy and trade-intensive with a higher level of discount. For businesses that may be eligible for the ETII discount, you will need to provide:

• Organisation information
• Name of energy supplier
• Relevant energy supply contract references (such as your account number)
• Meter point references (MPANs and MPRNs)

We encourage you to check your eligibility on the government website, here.

Portal Opening Date

The government will be opening a digital portal to apply for the higher discount in the near future. We are aware that the portal opening date is still uncertain at this time, and we will keep you informed as soon as we have more definitive information.

Application Process

It is important to note that businesses will have three months from the scheme’s opening date to apply for the higher discount. The government will determine eligibility based on the application, and may require additional information, such as Companies House information and eligibility for other support schemes, to validate eligibility.

The winter has seen a huge shift in the outlook for the gas and power markets, with concerns about the security of supplied trumped by the very warm temperatures seen in Europe and very strong wind generation.

The UK has actually seen temperatures this winter that are similar to last year, with the average London temperatures only 0.1 degree different over the six months of winter. However, temperatures on the continent have been considerably higher than normal, with averages temperatures in Austria 1.2 degrees above the previous year and 1.8 above the normal. These higher temperatures have reduced consumption with an average drop across the EU of 19% below the ‘Save Gas for Winter’ target of a 15% reduction.

This has left Europe with a lot more gas in store at the start of the summer, reducing the need for injections this summer. However, this is a midterm boon but does little to replace the gas which has been lost to the system with only minimal Russian flows into Europe.

Peak, Average Peak and Average Demand

In the UK, the winter was characterised by generally warm and windy conditions with a few cold snaps that were also windless. The cold windless spell was the issue that was most likely to test the UK system, and the doomsday scenario that could lead to blackouts. The UK experienced these conditions for a week in December and having survived this test, the market has been falling ever since.

The winter has thrown up a few interesting observations. First looking at demand, the December cold snap produced the highest demand in three years. While this peak was an outlier, the trend is clear with a considerable drop in average demand and drop in peak demand.

The magnitude of the cold peaks is also decreasing with fewer peaks over 43GW than ever before, with just 11 peak demands over 43 GW compared to 32 in Winter 2021. The extreme prices are evidently going some way to reduce demand.

While demand reduction has been a major boost this winter, the supply make up has also seen some big changes with more wind generation than ever before, producing 32.4% of electricity this winter.

The large increase in wind generation is due to the increase in installed capacity, as average wind speeds were below last winter’s levels. There was a small decline in gas fired generation which reduced gas usage in power generation by 3% on the previous year. Interconnector flows were lower as in October and November saw net exports, until the UK gas price discount to the continent was erased, and the UK stopped producing power to send to the continent. Since December, Interconnector flows have been 20% higher than last winter.

On the gas side, the main reduction has come in gas demand. There has been a considerable reduction in Local gas demand, which as temperatures across the whole six month period are largely similar, must predominantly be driven by consumer behaviour.

This consume behaviour is also apparent in the halving of Industry demand in the last two years. The other factor seen in Gas demand is that two years ago, we took gas from the continent and this winter, we supplied 40mcm/d of gas a day on average into the continent.

The gas was available because the UK was getting much more gas from LNG, this has come due to the UKs plentiful import capacity due to its three terminals. This has enabled LNG supply to rise considerably and there be enough gas to send into the continent.

Energy Prices

The high prices seen at the end of the summer, coupled with milder weather and increased wind generation, saw significant demand reductions over the winter. As the season progressed, this lower demand and strong LNG arrivals across Europe saw prices, which had been moving lower since late August, fall significantly at the end of 2022 and continue into this year.

Gas storage in Europe remained significantly higher than the previous winter and French nuclear generation levels also increased. As we ended the winter season, European gas storage remained at over 55% of capacity, meaning that over 300TWh less gas will need to be injected into storage this summer compared to last year.

In recent weeks, the downward trajectory has slowed as buying interest has returned. News of further potential issues with French nuclear generation provided support in March and more recently colder weather forecasts for early April, and production cuts by OPEC have seen prices rise from this years lows seen in March.

What are the key dates and information?

What is a Heat Network?

A Heat Network is a system that supplies heat (and in some cases, cooling) to multiple buildings from a central source.

These networks are often used in urban areas and can provide an efficient and cost-effective way of heating homes and businesses.

Heat Networks can use a variety of heat sources, including boilers, combined heat and power (CHP) plants, and renewable technologies such as geothermal or biomass.

Heat Networks have become increasingly popular in recent years as they can help reduce carbon emissions by utilising waste heat and renewable sources.

The EBDS provides support for Heat Networks, and it is essential to ensure that all Heat Networks register on the government portal to receive the benefits.

Application on Portal (from the first week of April)

From the first week of April, all Heat suppliers will be required to apply as a Heat network on a government portal.

It is crucial to note that all Heat networks must register, even if they do not receive the discount. Failure to apply will result in a £5,000 fine.

To register, Heat Networks will be expected to provide:

• Contact information
• Details of the Heat supplier
• Heat network details (Address, suppliers, MPAN/MSNs)
• Signed declaration from a “director of the heat network” (Templates will be provided)

First Discounts received from July-August 23

The government is expecting suppliers to rebill invoices from April to July if a site qualifies for the EBDS discount.

The pass-through requirements are the same as EBRS, and the delivery of the discount is expected to be the same (applied by the supplier to the invoicing).

Customers must be notified of the benefit they receive within 30 days of getting the support.

Equivalent rate

In April, the government will be publishing “equivalent rates.”

If a Heat provider is charging their residents less than the “equivalent rates” for energy, no further discounts or savings need to be passed onto tenants.

Further information

Please note that the wholesale curve & backing data is unlikely to be released before April.

Specific queries or issues can be sent to Arran Mornin at BEIS, but please anticipate a delayed response (arran.mornin@beis.gov.uk).