The Energy Bills Discount Scheme for Energy and Trade Intensive Industries (EBDS-ETII ), which includes the water and wastewater sector, has been referred to the Subsidy Advice Unit of the Competition and Markets Authority.
The Subsidy Advice Unit (SAU) has accepted the mandatory referral following a request from the Department of Energy Security and Net Zero (DESNZ).
The Scheme 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.
Information about the scheme provided by DESNZ to the SAU states:
“The support provided by the Scheme 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.
“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. “
“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.”
Sectors covered by the wide-ranging Scheme include:
- 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 motorcycles
The EBDS-ETII will run for 12-months, covering the period from 1 April 2023 to 31 March 2024.
Following the referral, which opened on 28 February, the SAU will prepare a report providing 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 and publish the report on 13 April 2023.
Deadline for receipt of any submissions by third parties who would like to comment on matters relevant to the SAU’s evaluation is 5pm on 14 March 2023. The SAU will only take a submission into account if it can be shared with DESNZ.
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