Energy Bills Discount Scheme (EBDS)

What was the Energy Bills Discount Scheme

The Energy Bills Discount Scheme (EBDS) was a government initiative that offers businesses concessions on non-domestic gas and electricity unit rates.

Unit rates are measured in kilowatt-hours (kWh) and represent the amount your business plays for either gas or electricity.

Designed to support businesses in managing their energy costs, the EBDS was particularly targeted at small and medium-sized businesses (SMEs) and those operating in energy-intensive industries.

The scheme consisted of three separate parts:^[1]

How did the Energy Bills Discount Scheme work?

The EBDS worked by providing businesses with a per-unit discount on the wholesale portion of their energy bill between 1 April 2023 and 31 March 2024.

The discount was only applied when wholesale prices exceed certain price thresholds for gas or electricity.

For the majority of businesses, the maximum discounts and threshold prices for both utilities were as follows:^[1]

• Gas - £0.00697 (roughly 7p) per kWh, with a price threshold of 10.70 per kWh

• Electricity - £0.01961 (roughly 2p) per kWh, with a price threshold of 30.20 per kWh

So, the lowest rate you could have been discounted to was 10.70 per kWh of gas and 30.20 per kWh of electricity. If your business was already paying these rates or cheaper, then it would not have been eligible for the discount.

To reiterate, the discount was only applied to the wholesale portion of your energy bill. Your final bill would have been larger as it accounts for other costs, such as operating fees and network charges.

Finally, when calculating your business energy outgoings, remember that initiatives such as the Energy Price Cap, Energy Price Guarantee, and Energy Bill Support Scheme are directed towards reducing household energy costs and do not affect business energy bills.

Is there further support for Energy Intensive Businesses?

There were larger discounts for businesses more susceptible to higher energy prices due to the amount of energy they use. These businesses are referred to as Energy and Trade Intensive Industries or ETIIs.

The government posted a list of all sectors eligible for the ETII scheme here. The maximum discounts and price thresholds for these sectors were as follows:^[2]

• Gas – 4p per kWh, with a price threshold of 9.9p per kWh

• Electricity - 8.9p per kWh, with a price threshold of 18.5p per kWh

To qualify as an ETII business, a business has to be in the top 20% for energy intensity and the top 40% for trade intensity across the UK.

Additionally, an organisation had to prove that 50% or more of its total revenue is generated from activity in one or more of the ETII eligible sectors.^[3]

This higher discount only applied to 70% of an ETII’s energy volume. The remaining 30% was eligible for the baseline discount.

Was my organisation eligible for the EBDS?

The EBDS was available to organisations on a non-domestic energy supply contract with a licensed energy supplier.^[4] These include:

• Businesses

• Third sector organisations, such as charities

• Public sector organisations such as schools, hospitals, and nursing homes

These businesses must have also adhered to one or more of the following:

• !

  Already be on existing fixed price contracts that were agreed on or after 1 December 2021

• !

  Be in the process of signing a new fixed rate contract

• !

  On deemed/out of contract or variable tariffs

• !

  On flexible purchase contracts

• !

  On variable ‘Day Ahead Index’ tariffs (Only available in Northern Ireland)

Was I eligible if I worked from home?

If you run your business from home, it is improbable that you’ll have a business energy account. To open a business energy account, you must use 50% or more of a property’s energy to run your business, and this is tricky to prove when working from home.^[5]

However, businesses run from home can benefit from the energy price cap set by Ofgem every quarter. For Q4, 1 October and 31 December 2025, the energy price cap is set at £1,755 per year for a typical household who use electricity and gas and pays by direct debit.^[6] This is £35 higher than the cap set in Q3, between 1 July to 31 September 2025 (£1,720).

Application process

Application for the EBDS varied depending on the three separate parts of the scheme.

Baseline Discount

All eligible non-domestic organisations needed not apply for the lowest discount on offer from the government – the baseline discount. This support was applied automatically to the wholesale portion of an energy bill.

Energy and Trade Intensive Industries (ETIIs)

All organisations that were eligible for ETII support prior to 27 April 2023 had to apply for their discount on or before 25 July 2023.^[1]

After 25 July 2023, you may have only applied for ETII support if you met the eligibility criteria for support on or after 27 April 2023. For example:

• If you were a new organisation

• You had since started generating 50% or more of your total revenue from activity in an eligible sector.

Organisations required six months’ worth of financial evidence proving they met the requisite criteria for ETII support. Applications must have been submitted within 90 days from the date of this six months of evidence is accumulated.^[7]

Heat Network Support

As non-domestic customers in Great Britain and Northern Ireland, all eligible heat networks received a minimum of the baseline discount in accordance with the EBDS.

Further financial relief was available for heat networks with domestic end consumers, though that is not relevant to businesses. More information on the EBDS’ heat network scheme can be found here.

How long did the Energy Bills Discount Scheme last for?

The EBDS was effective for a period of 12 months starting from April 1, 2023, until March 31, 2024. This scheme supplanted the Energy Bill Relief Scheme, which provided support to businesses and organizations from October 1, 2022, to March 31, 2023.^[1]

What other help is available to reduce my business energy bills?

There are a range of ongoing initiatives to help businesses keep their energy bills down. Below is a list of options that could help you manage your business’s energy usage:

Benefits of switching business energy supplier

If your business doesn’t compare energy suppliers regularly, the likelihood is that you’re paying too much for gas and electricity.

Switching business energy supplier can lead to cost savings by finding a supplier with better rates or more suitable tariffs for your business's energy usage patterns. Indeed, comparing business energy quotes available on the market could lead to thousands of pounds worth of savings on your business energy bill.^[12]

Additionally, switching suppliers can provide access to improved customer service, more flexible contract terms, and the opportunity to support renewable energy initiatives, contributing to sustainability goals and enhancing your business's environmental credentials.

If you prefer to stay with your actual supplier, it is always worth re-negotiating your contracts. While the savings will most likely be smaller, you may still receive a better quote than your standard renewal offer.