The government is introducing its new Energy Bills
Discount Scheme (EBDS) for businesses on 1 April.
We’ve put together this explainer on what it is and what
support will be available for businesses in the sector.
What is the EBDS?
The Energy Bills Discount
Scheme does pretty much what it says on the tin; it will provide businesses with a discount on their energy bills and will run from 1 April 2023 to 31 March 2024.
It replaces the
Energy Bill Relief Scheme (EBRS), which was launched in October last year to
provide a discount on wholesale gas and electricity prices for all non-domestic
consumers.
The EBRS was
designed as a temporary six-month measure to protect businesses from soaring
energy costs, and will end on 31 March 2023.
With wholesale gas
prices now at similar levels to before Putin’s invasion of Ukraine and almost half what they were in the autumn, the government believes a new set of
measures is in order.
The government says
that the new scheme “strikes a balance between supporting businesses over the
next 12 months and limiting taxpayer’s exposure to volatile energy markets” and
has set aside £5.5 billion for it, based on estimated volumes.
Who is eligible?
As with the
original scheme, the EBDS will be available to everyone on a non-domestic
contract including:
- businesses
- voluntary sector
organisations, such as charities
- public sector
organisations such as schools, hospitals, and care homes.
who are:
- on
existing fixed price contracts that were agreed on or after 1 December 2021
- signing
new fixed price contracts
- on
deemed/out of contract or standard variable tariffs
- on
flexible purchase or similar contracts
- on
variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)
What discounts are
available?
Eligible
non-domestic consumers will receive a per-unit discount to their energy bills
during the 12-month period, subject to a maximum
discount, if wholesale prices are above a
certain price threshold.
For most
businesses, these maximum discounts have been set at:
- electricity -
£19.61 per megawatt hour (MWh) with a price threshold of £302 per MWh.
- gas - £6.97 per MWh
with a price threshold of £107 per MWh
What about businesses that use a very large amount of energy?
The
government recognises that some businesses and industries are particularly
vulnerable to high energy prices due to their energy intensive and trade
exposure.
These Energy and Trade Intensive Industries (ETIIs) will receive
a higher level of support, subject to a maximum discount, of:
- 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 majority of ETIIs are heavy industries such as mining
and manufacturing. However, the list also includes:
- libraries
- museums
- historical buildings and similar visitor
attractions
- botanical and zoological gardens and nature reserves
So the event sector isn't an ETII?
Not on the face of it, no. The government used Standard Industry Classification (SIC) codes to designate industries as ETIIs.
SIC codes are used to classify businesses by the type of economic activity they
are engaged in. There are a number of SIC codes available for the events sector to use, but
these are relatively new and not yet widely used, having only been introduced
within the last year.
The government has said it will publish further information
on the ETII scheme by the end of March 2023, including guidance for firms that
believe their operations are not correctly classified by SIC codes. Businesses
will need to register directly with the Department for Business, Energy, and
Industrial Strategy (BEIS) to assess their eligibility.
Does this mean the sector could yet be designated an ETII?
Well, I wouldn’t hold your breath. The government appears to
have adopted a policy of passing the costs down the supply chain. Despite industry leaders making the case to BEIS for the events sector to be considered an
ETII, the government policy seems to be for businesses to transition and adapt
to a high-cost energy environment.
What are the possible effects of this?
In a worst-case scenario, energy cost increases could lead
to event venues closing or losing business, the knock-on effects of which would
be felt all the way along the supply chain, hindering the sector’s recovery.
It'll be worth keeping an eye on any further changes to the scheme before 1 April, including which sectors can be designated as ETIIs, but the truth is for many event businesses is that we'll simply have to wait and see exactly
how this plays out.
M&IT editor Paul Harvey is a journalist with more than 15 years of experience. He began his career in the local press, working for various titles across the north. Since joining M&IT in 2013, he has become a trusted and respected voice in the sector, championing event professionals and reporting on all aspects of the events industry for the brand.
