Heat networks with domestic end consumers are eligible to receive a sector-specific discounted unit rate for gas and/or electricity under the Energy Bills Discount Scheme (EBDS), which the Government estimates could reduce wholesale energy costs by up to 20%. This replaces the Energy Bill Relief Scheme and applies retrospectively from 1 April 2023 until 31 March 2024.
The discount has been introduced so that households connected to heat networks do not face disproportionately higher bills compared with gas and electricity customers supported by the Energy Price Guarantee. This is applied through reductions in the wholesale element of the heat tariff up to a Minimum Supply Price (£340/MWh for electricity and £78.3/MWh for gas).
Eligible heat suppliers are required to apply for this support and pass on the discount to domestic end consumers. Failure to submit an application to receive the EBDS support by Tuesday 25 July 2023 could lead to enforcement action, including a penalty notice of up to £5,000.
Are you a Heat Supplier?
The heat supplier will be the person responsible for supplying and charging for the supply of heating and/or hot water serving one or more domestic end consumers through a heat network.
The heat supplier may be a landlord providing heat to tenants under a lease or tenancy agreement, or a third party ESCO appointed to operate the heat network and bill customers directly under separate supply agreements.
Although intermediaries may be involved (such as managing agents or outsourced metering and billing providers), ultimate responsibility will remain with the eligible heat supplier.
The clock is ticking …
Heat suppliers must provide evidence of their eligibility to apply to the scheme, along with details of the relevant heat network(s), energy suppliers, and gas or electricity meter point numbers etc. The applicant will also be required to submit a declaration letter signed by a director that states all the information in the application is accurate to the best of their knowledge.
Successful applicants will receive a qualifying heat supplier certificate which will allow the EBDS discount to be applied to usage from 1 April 2023. Heat suppliers will need to consider how the discount is retrospectively applied to domestic end users.
Further information can be found on our website, or please contact a member of our Energy & Sustainability team for advice on how this impacts you and your tenants.
