What is Energy Intensive Industry exemption?
24th July 2018
To ensure the UK meets its low carbon targets, the Government has introduced several policies that are driving renewable growth. However, they’ve also increased the cost of electricity and made UK prices higher than in other countries.
To help Energy Intensive Industries (EIIs) in the UK compete with their EU counterparts, the Government suggested they should be exempt from some Third Party Charges (TPCs). The cost of the exemption would be paid for through an increase in costs for non-EII businesses.
The Government proposed that EIIs should be exempt from the costs of the Renewable Obligations (RO) scheme, the Contracts for Difference (CfD) scheme and the Feed in Tariff (FiT) scheme.
What's the impact? Parliament recently approved the CfD and RO exemptions for EIIs, and the table below shows the new prices of these schemes for non-EII businesses:
The CfD exemption charge is likely to change from quarter to quarter and will be charged monthly.
What are EIIs?
EIIs - including mining, steel, engineering and heavy manufacturing - consume lots of energy, so their electricity costs make up a considerable proportion of their production costs.
How will EIIs benefit from the exemptions?
The Department of Business, Energy and Industrial Strategy (BEIS) expects the measures to benefit over 130 heavy users, saving them around £100m a year in energy costs. The total energy exempt volume will be around 10TWh per annum.
What are Third Party Costs (TPCs)?
TPCs are the non-energy elements of your bill that relate to: running the electricity network efficiently; paying organisations involved in its running; government policies; and incentivising renewables.
How can Haven Power help?
We’ll keep customers updated on any changes associated with EII exemption costs.
Also, our Complete product includes the predicted costs of EII exemption in the electricity unit price, which means it can offer more budget certainty.