Hospitality businesses expect a further rise of 82% in their energy bills when the Government’s support is significantly reduced on 1st April with the introduction of the new Energy Bills Discount Scheme (EBDS).

Below we’ve outlined the details of the new scheme, but for the latest information, we recommend visiting the government website.

You will also find details of the support available to Regency members below - along with ensuring you’re not paying over the odds for your energy, we can offer practical operational advice on how to reduce consumption and increase sustainability.

Energy Bills Discount Scheme (EBDS)

The new Energy Bills Discount Scheme (EBDS) will run for 12 months from 1 April 2023 to 31 March 2024. This scheme replaces the Energy Bill Relief Scheme which supported businesses and organisations between 1 October 2022 and 31 March 2023.

The scheme is made up of 3 different parts:

1. The baseline discount will provide some support with energy bills for eligible non-domestic customers in Great Britain and Northern Ireland – this support will be applied automatically
2. The Energy and Trade Intensive Industries (ETII) discount will provide a higher level of support to businesses and organisations in eligible sectors – you will need to register to get this support
3. The Heat Network discount will provide a higher level of support to heat networks with domestic end consumers – you need to register to get this support

Most eligible non-domestic customers receiving the baseline discount should expect to see it in their May bill. You should continue to pay your bills as normal until the discount is applied.

The Energy Bill Discount Scheme will be established in regulations made under the Energy Prices Act 2022. The regulations are expected to come into force in late April 2023 and the scheme will not be finalised until then. However, the discount will apply to bills from 1 April 2023.

Eligibility for the EBDS baseline discount

The scheme will be available to everyone on a non-domestic energy supply contract with a licensed energy supplier including:

• Businesses
• voluntary sector organisations, such as charities
• public sector organisations such as schools, hospitals and care homes

who are:

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

Comparable support will be extended to non-domestic energy customers who receive gas or electricity delivered over public networks from non-licensed providers.

The support you may be eligible to receive

Most non-domestic customers will not see additional support on their energy bills from April and any support is likely to be significantly reduced. It is important that organisations continue to shop around for the best deals as the actual price you pay for your energy will vary between energy suppliers.

How the baseline discount is applied

Eligible non-domestic customers will receive a per-unit discount to their energy bills during the 12-month period from April 2023 to March 2024.This is subject to a maximum discount.

The relative discount will be applied if wholesale prices are above a certain price threshold.

For most non-domestic energy users in Great Britain and Northern Ireland these threshold prices and maximum discounts have been set at:

• Electricity: a maximum discount of £19.61/MWh and discounts being applied when the wholesale price goes above £302/MWh
• Gas: a maximum discount of £6.97/MWh and discounts being applied when the wholesale price goes above £107/MWh

The discount is calculated as the difference between the wholesale price associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the floor price, until the total discount per MWh reaches the maximum discount for that fuel. The discount is only applied to the wholesale element of the bill and therefore the final per unit price paid by non-domestic customers will differ as it includes other costs such as network charges and operating costs, which is why it is important you continue to shop around to find the best deal.

Who’s eligible for the Energy Bills Discount Scheme?

All commercial businesses and organisations are eligible. The support will apply to any fixed contracts agreed on or after 1 December 2021, as well as to deemed, variable and flexible contracts.

Full guidance on the Energy Bills Discount Scheme has been published on the government website.

How can Regency Purchasing Group help?

We work with our members and energy suppliers to offer a range of solutions to manage energy bills and reduce overhead costs. We partner with trusted energy consultants to source the most competitive energy prices for our members and we can provide advice on what type of contract is best for your business, as well as continuing to monitor the market for improved future contracts and deals.

We are also able to ensure discounts have been applied correctly.

Along with making sure our members are not paying too much for their energy, we also offer practical, operational advice on how to reduce consumption and increase sustainability, including:

• Conducting energy audits to identify energy waste and savings
• Identifying opportunities for turning off equipment when low trading/not in use
• Recommending LED light bulbs and energy saving equipment
• Calculating energy use of key menu items based on cooking times
• Reviewing cooking processes and engineering menus to reduce equipment usage
• Recommending suppliers of intelligent kitchen extract systems and induction equipment
• Advising on kitchen maintenance and cleaning, including service contracts and plans.

Additionally, our advanced menu management software MenuIQ can help calculate your complete menu costs, including the cost of energy required to prepare and cook each dish, providing operators with complete transparency on gross profit (GP) by including ALL associated costs. To find out more, visit www.menuiq.co.uk

Get in touch with a member of the team to explore energy and cost savings available to your business.