Energy Bills Discount Scheme
What it means for you
The Government has introduced the Energy Bill Discount Scheme (EBDS). This scheme will apply a discount to energy usage for 12 months between 1 April 2023 and 31 March 2024, based on the wholesale price of energy.
- Customers with a monthly Weighted Average Price (WAP) above the Government Support Price of £302/MWh will get a discount to this level (subject to a maximum discount of £19.61/MWh)
- WAP should include all fixes and unfixes for the period
- Discount applied at Meter Supply Point (MSP) to MPAN level kWh consumption.
- This discount will be calculated on a monthly basis
The following table give examples of how we calculate the discount.
|Customers Monthly WAP||Government EBDS Support Price||Government ETII Support Price||Max EBDS Discount||Final EBDS Discount|
Shaping costs – Drax are following Department for Energy Security and Net Zero guidance that WAP should not include any costs related to trading fees, volume tolerance, shape/imbalance premiums.
Cash-out contracts – Drax have followed Department for Energy Security and Net Zero guidance that cash-out residuals should be included in the WAP.
Organisations that qualify as an Energy and Trade Intensive Industry (ETII) may be eligible for an even greater discount. Find out more on our ETII and heat networks page.
If you’re on a Flex product, you are eligible for a discount based on your monthly baseload Weighted Average Price (WAP) between 1 April 2023 and 31 March 2024.
Any price reduction will depend on the difference between your monthly weighted average baseload price, determined by your individual hedging approach, and the government supported price of £302/MWh. The maximum support available per unit of energy will also be limited to £19.61/MWh.
We’ll compare your calculated WAP to the relevant Government Supported Price to calculate your discount.
The discount applied will be in pence per kilowatt hour (p/kWh), and at meter supply point. Cashing in or changing contracting positions or financial instruments, or other similar actions in order to maximise support under the scheme will impact eligibility.
More information regarding EBDS and eligibility can be found on the Government website.
What if you have additional energy market exposure?
If you have entered into any arrangements outside of your supply contract to manage risks associated with wholesale prices and are expected to use more than 0.5GWh a year or use more than 0.5MW in any half hour, then you need to be aware of part 4 of the EBRS Regulations. You can find more details on the Government's Department for Energy Security and Net Zero website.