Business Energy Glossary
What was the Energy Bills Discount Scheme (EBDS)?
The Energy Bills Discount Scheme (EBDS) was the UK government scheme providing reduced business energy support from 1 April 2023 to 31 March 2024. EBDS replaced the Energy Bill Relief Scheme (EBRS), which had provided substantially larger discounts during the wholesale price spike of late 2022 and early 2023. EBDS offered a small flat-rate discount to all non-domestic customers (1.961 p/kWh electricity, 0.697 p/kWh gas) and additional support to qualifying Energy and Trade Intensive Industries (ETII) representing around 70 sectors with deep international competitiveness exposure.
EBDS was the final UK government scheme providing direct discounts on business energy bills. Understanding the transition from EBRS to EBDS and the end of EBDS in March 2024 helps in interpreting bills, contracts, and the current policy environment.
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Standard EBDS discount
The standard EBDS discount applied to all eligible non-domestic customers:
- Electricity. 1.961 p/kWh discount, applied when wholesale prices exceeded 30.2 p/kWh.
- Gas. 0.697 p/kWh discount, applied when wholesale prices exceeded 10.7 p/kWh.
The discount was much smaller than the EBRS support it replaced. EBRS had capped the wholesale element at 21.1 p/kWh for electricity and 7.5 p/kWh for gas; EBDS provided modest support only above significantly higher trigger levels.
ETII enhanced support
Energy and Trade Intensive Industries (ETII) qualified for higher discounts:
- Electricity. 8.91 p/kWh discount.
- Gas. 4.0 p/kWh discount.
The ETII list covered around 70 sectors with both high energy intensity and significant international trade exposure. Sectors included cement, glass, steel, chemicals, paper, ceramics, and some food processing categories. Each business had to apply for ETII status and meet the eligibility criteria.
EBDS price trigger
EBDS was a contingent discount that applied only when wholesale prices exceeded the trigger:
- If wholesale electricity below 30.2 p/kWh: no standard EBDS support.
- If wholesale electricity above 30.2 p/kWh: 1.961 p/kWh discount applied.
For most of the EBDS period (April 2023 to March 2024), wholesale prices were below the trigger levels and no standard discount was applied. ETII discounts had different trigger thresholds and were applied more consistently.
End of EBDS
EBDS ended on 31 March 2024. The reasons for ending the scheme:
- Wholesale prices had fallen substantially from autumn 2022 peaks.
- The contingent trigger meant the standard discount was rarely applied in practice.
- The fiscal cost of ETII enhanced support remained substantial.
- Policy emphasis shifted to structural reforms (REMA, contract reform) rather than discount schemes.
No equivalent successor scheme has been announced. UK business energy support is now limited to broader policies like the EII Scheme (carbon costs), CCA (Climate Change Levy reduction), and sector-specific decarbonisation grants.
What replaced EBDS
Current UK business energy policy emphasises:
- EII Scheme. Compensation for Energy Intensive Industries on the indirect costs of certain UK policies.
- CCA (Climate Change Agreement). CCL reduction for energy-intensive sectors meeting efficiency targets.
- British Industry Supercharger. Reduced network charges and exemption from certain policy costs for energy-intensive industries.
- Industrial Energy Transformation Fund (IETF). Capital grants for industrial decarbonisation.
- Public Sector Decarbonisation Scheme. Public sector building decarbonisation grants.
The policy approach has shifted from universal discount schemes to targeted support for specific competitiveness and decarbonisation objectives.
Implications for businesses
Practical implications:
- Businesses can no longer rely on direct government discount on energy bills.
- Contract pricing decisions cannot assume future intervention.
- Energy efficiency, on-site generation, and renewable procurement are the main remaining levers for managing cost exposure.
- Energy-intensive businesses should assess eligibility for EII, CCA, and the Supercharger.
- The wholesale market structure (with hedging, fixed contracts, and flexible procurement) is the primary mechanism for managing price risk.
What was the Energy Bills Discount Scheme (EBDS) FAQs
What was the Energy Bills Discount Scheme?
A UK government scheme from 1 April 2023 to 31 March 2024 that replaced the Energy Bill Relief Scheme. EBDS provided a small flat-rate discount to all non-domestic customers and enhanced support for Energy and Trade Intensive Industries (ETII).
How much was the EBDS discount?
Standard discount: 1.961 p/kWh electricity, 0.697 p/kWh gas, applied only when wholesale prices exceeded trigger levels. ETII discount: 8.91 p/kWh electricity, 4.0 p/kWh gas for qualifying energy-intensive sectors.
When did EBDS end?
31 March 2024. No equivalent successor scheme has been announced. UK business energy support is now limited to targeted programmes like the EII Scheme, CCAs, the Supercharger, and decarbonisation grants.
How was EBDS different from EBRS?
EBRS (Oct 2022-Mar 2023) provided substantial universal discounts capping wholesale at 21.1 p/kWh electricity and 7.5 p/kWh gas. EBDS (Apr 2023-Mar 2024) provided much smaller contingent discounts only above high trigger levels, plus ETII enhanced support.
Who qualified for ETII enhanced support?
Around 70 Energy and Trade Intensive sectors including cement, glass, steel, chemicals, paper, ceramics, and some food processing. Each business had to apply for ETII status and meet the eligibility criteria.
Was the EBDS standard discount actually paid?
Only when wholesale prices exceeded the trigger levels. For most of the EBDS period, wholesale prices were below the triggers and no standard discount was applied. The contingent design meant standard EBDS was rarely activated in practice.
Is there a current scheme like EBDS?
No. EBDS ended on 31 March 2024 and no equivalent successor scheme has been announced. Current UK business energy policy emphasises targeted support (EII, CCA, Supercharger) rather than universal discount schemes.
How does EBDS affect my current bill?
EBDS does not affect bills issued after 31 March 2024. Historical bills from April 2023 to March 2024 may show EBDS support where the trigger was met. For ETII-qualified sites, the enhanced support is reflected in those bills.