BMF ADVISES ENERGY-INTENSIVE USERS TO APPLY FOR THE NEW ENERGY BILL RELIEF SCHEME

FOLLOWING the Chancellor of the Exchequer’s announcement regarding changes to government support for business energy costs from 1 April 2023, the BMF is advising members to check whether they should apply for the higher level of financial assistance available to energyintensive industries.

The UK- wide Energy Bill Discount Scheme (EBDS), which replaces the current Energy Bill Relief Scheme, is set to provide a discount on energy prices, rather that the existing arrangement which caps energy prices. Most businesses will find that their energy supplier will automatically apply the standard discount to their bills.

However, there are slightly different proposals for energy-intensive industries, which include manufacturers of building materials, and they may need to register for this higher level of assistance.

Commenting on the changes, BMF CEO, John Newcomb said “The overall package being offered by the government from 1 April 2023 is substantially below the level of support provided over the winter months. This will be a major concern for energy-intensive manufacturers but they should also be aware that the may not automatically receive the proposed discount and may have to register to receive it. Details of how to do that have not yet been released, but we will be advising members soon as they are available”.

The governments proposals for the new EBDS scheme follow.

All Businesses

For eligible customers who have a contract with a licensed energy supplier, the offer is:

• From 1 April 2023 to 31 March 2024, all businesses that have a contact with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their as bill - and a unit discount of up to £19.61/MWh on their electricity bill.

• This will be the subject to a wholesale price threshold - set with reference to the support provided for domestic consumers - of £107/MWh for gas and £302/MWh for electricity. This means that businesses facing energy costs below this level will not receive support.

Energy-Intensive Industries

• Eligible businesses will receive a discount reflecting the difference between a price threshold and the relevant wholesale price.

• The price threshold will be £99/MWh for gas and £185/MWh for electricity.

• This discount will only apply for 70% of energy volumes and will be subject to a maximum discount of £40.o/MW for gas and £89.1/MWh for electricity.

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