Energy Bills Discount Scheme Update: Additional Support for Energy & Trade Intensive Industries

In January 2023, the government announced the new Energy Bills Discount Scheme that will come into effect from the 1^st April 2023. The scheme will help UK businesses and non-domestic energy users including charities and the public sector access a discount on their energy bills.

Read the announcement of the scheme here.

Government also included in the announcement that businesses requiring more substantial discounts can apply for a higher level of support. Below is a summary for the Energy and Trade Intensive Industries (ETII) scheme.

Energy Bills Discount Scheme: Support for Energy and Trade Intensive Industries

Details of the additional support for the Energy and Trade Intensive Industries (ETII) have now been announced by government. Non-domestic customers operating primarily in energy intensive sectors could receive a higher level of support. But organisations need to take action to receive the support.

Who is eligible for ETII support?

Your organisation must have a non-domestic contract with a licensed energy supplier and be:

• On existing fixed price contracts that were agreed on or after 1^st December 2021
• Signing new fixed price contracts
• On deemed/out of contract or variable tariffs
• On flexible purchase (or similar) contracts
• On variable ‘Day Ahead Index’ (DAI) tariffs (Northern Ireland scheme only)

Note that your organisation should be able to prove that at least 50% of its revenue is being generated from UK-based activity and is within one of the eligible sectors. Eligibility for local authorities will be determined at a premise level and where there are no relevant accounts, they will be required to declare that at least 50% of the space is taken up by operations within an eligible sector.

Guidance for firms that believe their operations are not correctly classified by Standard Industry Classification (SIC) code will be published by the end of March 2023.

What kind of support could ETII’s receive?

ETII’s will receive a discount that reflects the difference between the price threshold and the relevant wholesale price. These are:

• Electricity – £185 per MWh
• Gas – £99 per MWh

However, the discount will only apply to 70% of energy volumes and will be subject to a ‘maximum discount’ of £40.0/MWh for gas and £89/MWh for electricity. The remaining 30% of energy volume will be covered by the baseline level of support where your organisations wholesale price meets the baseline eligibility criteria.

To put this in to context, an ETII qualifying medium-sized manufacturer using 1,600 MWh of gas and 200 MWh of electricity each month, could receive up to £687,120 under the new ETII scheme in the 23/24 financial year.

It’s likely that the EBDS and the ETII will show up as one line on your energy bill as your supplier will do a singular calculation for the overall discount owed.

Read more detail about the scheme here.

How can you apply for the discount?

Applications open on 26th April 2023 and eligible organisations will have 90 days from then to apply for ETII support online. The link to the application portal is expected to be updated on this page once live.

Applicants will need to provide information about their organisation or business including:

• contact details
• registered name and address
• company registration number (if you have one)
• up to 4 ETII eligible SIC codes
• whether you pay bills directly to an energy supplier and details of any intermediaries involved (such as a landlord)
• the names of gas and/or electricity suppliers
• the gas or electricity meter point numbers (MPRN or MPAN) associated with the property, found on your bill from your energy supplier
• the name of your organisation as it appears on your bill from your energy supplier(s)
• a declaration letter signed by a named director or equivalent of your organisation or business (a template will be provided)

Evidence for your application

You may also need to provide financial evidence to determine your eligibility, such as:

• your most recent full set of end-of-year accounts – if you do not have these, upload evidence of your most recent company accounts, covering a minimum period of the most recent 6 months
• an Income Statement referring to the same time period as the accounts
• a sample of 20 sales invoices, no older than 12 months from the date of the signed declaration, which demonstrates activity that falls within an eligible sector
• license or trade body membership details for regulated industries (if applicable)
• any additional evidence you want to support your application

To help with the processing of your application, you could also upload a letter signed by an external auditor or chartered accountant. This should confirm that you are in an eligible sector, and that 50% or more of your revenue generated from Great Britain and Northern Ireland are in an eligible sector.

Full details can be found here.

We would encourage you to submit your application early if you believe you are qualified, as energy suppliers will not be able to apply the discount rate until eligibility has been confirmed by the Department for Energy Security and Net Zero.