Referral of Energy Bills Discount Scheme for Energy and Trade Intensive Industries by the Department for Energy Security and Net Zero
The SAU published a report from DESNZ concerning the Energy Bills Discount Scheme for Energy and Trade Intensive Industries (EBDS-ETII).
| SAU referral type | Mandatory referral |
| SAU referral state | Closed |
| Sector(s) | Agriculture, forestry and fishing: Arts, entertainment and recreation: Construction: Electricity, gas, steam and air conditioning supply: Manufacturing: Mining and quarrying: Professional, scientific and technical activities: Water supply; sewage, waste management and remediation activities: Wholesale and retail trade; repair of motor vehicles and motorcycle |
| SAU referral opened | 28 February 2023 |
Administrative timetable
| Date | Action |
|---|---|
| 13 April 2023 | SAU report published |
| 14 March 2023 | Deadline for receipt of any third-party submissions (submissions after 5pm on this date cannot be taken into account) |
| 28 February 2023 | Beginning of reporting period |
Final report
13 April 2023: The SAU has published its report providing advice to the Department for Energy Security and Net Zero concerning the EBDS-ETII scheme. The report includes the SAU’s evaluation of DESNZ’s assessment of compliance of its proposed scheme with the requirements set out in the Subsidy Control Act 2022.
- Final report (13.4.23)
Request from Department of Energy Security and Net Zero
28 February 2023: The SAU accepted a request for a report from DESNZ concerning the Energy Bills Discount Scheme for Energy and Trade Intensive Industries (EBDS-ETII). This request relates to a Subsidy Scheme of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of the DESNZ assessment of whether the scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the scheme provided by DESNZ
The EBDS-ETII will provide eligible non-domestic consumers with a per-unit discount to their energy bills, subject to a maximum discount. It will only apply to 70% of energy volumes. The maximum discounts and price threshold for these sectors are:
- electricity - £89 per MWh with a price threshold of £185 per MWh
- gas - £40 per MWh with a price threshold of £99 per MWh
The discount will be calculated as the difference between the wholesale prices associated with an energy contract and the price threshold. The discount is phased in when the contract’s wholesale price exceeds the threshold price, until the total discount per MWh reaches the maximum discount for that fuel and UK Government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that are passed on.
The support provided by EBDS-ETII will protect businesses from excessively high and volatile energy prices over the coming year. It is only available for a defined set of non-domestic energy users that are particularly vulnerable due to their energy intensity and trade exposure.
EBDS-ETII is intended to prevent unnecessary insolvencies, limit the competitive and trade disadvantage for UK firms competing with producers from countries where governments are providing compensation for higher energy prices, preserve a viable competitive structure for non-domestic energy contracting in the UK, and mitigate the effects of inflation.
The ETII sectors were identified via the Energy Bill Relief Scheme Review as those meeting certain thresholds for energy and trade intensity, in addition to sectors currently included in existing Energy Compensation and Exemption schemes.
Energy intensity was based on electricity and gas consumption as a percentage of a sector’s Gross Value Added (GVA) using Office for National Statistics (ONS) data. Trade intensity was based on goods trading using ONS data. To qualify as an ETII sector, the sector had to be above the 80th percentile for energy intensity and the 60th percentile for trade intensity, meaning that the sector are less able to pass on increasing costs to their customers due to international competition.
Organisations will be eligible for support if 50% of the organisation’s value of sales or services for the financial year 2021/2022 can be attributed to products or services falling within an eligible sector. There will be a number of ways in which businesses can prove eligibility, including by having an eligible SIC code with Companies House. There will be an alternative verification process for organisations who are not required to register with Companies House or who believe they have incorrect SIC codes listed. All eligible businesses within the ETII sector will be required to apply via a digital portal.
The EBDS-ETII’s criteria, including threshold application, is designed to ensure that there is no material advantage or disadvantage for anyone receiving this subsidy, and to preserve a viable competitive market structure for eligible sectors.
The EBDS-ETII will run for 12-months, covering the period from 1 April 2023 to 31 March 2024.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the EBDS-ETII, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, visit the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submission to us at [email protected], copying the public authority: [email protected]
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
-
the SAU will only take your submission into account if it can be shared with DESNZ. The SAU will send a copy of your submission to DESNZ together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the scheme or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DESNZ using the email address provided above.
-
the SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
-
for further details on confidentiality of third-party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- SAU project team: [email protected]
- CMA press team: 020 3738 6460 or [email protected]