Written by: Eelinn Vanquaethem, Marketing & Content Manager

In a nutshell

The Energy Bill Discount Scheme (EBDS) introduced as a replacement for the Energy Bill Relief Scheme (EBRS), is set to conclude on 31^st March 2024. This means that you will no longer benefit from a reduced incoming fuel bill.

Next steps:

If you haven't already, instruct your metering & billing provider to perform a tariff review with the incoming fuel rates you will be charged from 1st April 2024.

To proceed with a tariff review, we require:

• 12 months of incoming fuel supplier invoicing;
• a completed RFI form, which can be requested from your account manager, and:
• a purchase order for the cost of the service (your account manager can confirm the cost).

We recommend doing this by the end of January 2024, so your provider can give the recommended 31-days tariff change notification notice to your residents.

If you applied the EBDS discount to tariffs and fail to recalculate them, your metering & billing provider will continue to collect funds at the tariff rate last agreed, which may not be enough to cover new incoming fuel costs.

If you enter an incoming fuel contract after the 1^st February 2024, you may benefit from a lower price cap for the remaining two months. Please speak to your account manager for more information.

Currently, we are not aware of any additional government support following the EBDS, however we remain vigilant and continue to update you should we hear of anything.

As we step into 2024, it is pivotal for heat network operators to stay informed about critical shifts in the energy landscape. The Energy Bill Discount Scheme (EBDS), introduced as a successor to the Energy Bill Relief Scheme (EBRS), is set to conclude on 31^st March 2024. This update aims to provide a comprehensive overview of the impending changes, the EBDS's impact on heat networks, and the essential steps our clients and all heat network operators need to take to ensure a seamless transition.

Contents

A recap of the Energy Bill Discount Scheme (EBDS)

• Updates for contracts entered after 1^st February 2024

Next steps for heat network operators and suppliers

A recap of the Energy Bill Discount Scheme (EBDS)

The EBDS, initiated by the Government to assist non-domestic consumers in affording their energy bills, has been in effect since 1^st April 2023. As a response to the economic climate, it provided reduced discounts for those on non-domestic fixed-price energy contracts. A lower price cap was additionally put in place to further help domestic consumers on heat networks. This scheme and the additional heat network discount, which was anticipated to be temporary, will conclude on 31^st March 2024.

For heat networks, the retail unit charges under EBDS are capped at:

• Gas: 7.45p/kWh excl. VAT (7.83p/kWh inc. VAT)
• Electricity: 32.4p/kWh excl. VAT (34p/kWh incl. VAT)

Figure 1: The above chart illustrates how much a heat supplier would have to pay towards each element of a contract at 30p/kWh under the Energy Bill Relief Scheme compared to the Energy Bill Discount Scheme. 

As with the EBRS, savings made from the EBDS should have been passed on to heat network residents, in adherence to the Energy Prices Act 2022. The Government will have compensated suppliers for the reduction in wholesale gas and electricity unit prices.

Updates for contracts entered after 1^st February 2024

Any heat network that applies for the EBDS heat network discount after the 1^st February will benefit from a lower price cap.

From 1^st February 2024, gas supply will be capped at 6.5p/kWh (exc. VAT) instead of 7.45p/kWh (exc. VAT).

This change is a result of the Energy Bills Discount Scheme Regulations 2023 and the Energy Bills Discount Scheme (Northern Ireland) Regulations 2023, counting supply price figures exclusive of VAT. This adjustment is applicable to fixed contracts entered into on or after 1^st February 2024 and for all existing variable, flexible, and day ahead (DAI) contracts until 31^st March 2024.

For those on fixed contracts entered before the 1^st February 2024, the previous price cap of 7.45p/kWh (exc. VAT) will remain.

Speak to your account manager for more information.

Next steps for heat network operators and suppliers

If you haven't already, instruct your metering & billing provider to perform a tariff review with the incoming fuel rates you will be charged from 1^st April 2024.

To proceed with a tariff review from us, you will need:

• 12 months of incoming fuel supplier invoicing;
• A completed request for information (RFI) form, which can be requested from your account manager, and;
• A purchase order for the cost of the service (your account manager can confirm the cost).

If we are not your metering & billing provider, we suspect you will need to provide them with similar documentation.

We recommend reviewing the energy tariffs for all your heat networks by the end of January 2024, so you can give the recommended 31-days tariff change notification notice to your residents.

Failure to recalculate tariffs after applying the EBDS discount may result in your metering & billing provider continuing to collect funds at the tariff rate last agreed, potentially falling short to cover new incoming fuel costs.

As we approach the conclusion of the EBDS, it's crucial for all heat network operators to proactively review their energy tariffs and ensure compliance with the new rates. We remain vigilant regarding any additional government support post-EBDS and will provide timely updates as needed.