Plans to help super charge the economy recently moved a step closer following the conclusion of the UK Government’s consultation into their proposed British Industry Supercharger (BIS) scheme. If your company has or could qualify for Energy Intensive Industries (EII) status, you will likely see a significant reduction in your electricity costs in the not-too-distant future.

On 23^rd February 2023 the UK Government announced its plans for BIS, which aims to further increase the competitiveness of British companies in Europe. The plan involves introducing the following 3 measures which address the areas of the UK energy system which currently contribute to higher energy costs for EIIs than comparable countries:

1. An increase in the subsidy under the existing EII Renewable Levy Exemption scheme from 85% to 100% aid intensity. This subsidy relates to the non-commodity cost of Feed-in-Tariff (FiT), Contracts for Difference (CfD) and Renewables Obligation (RO)
2. A new full exemption from the indirect costs associated with the GB Capacity Market
3. A proposed EII Network Charging Compensation (NCC) Scheme which would provide a 60% reduction in the charges paid for using the GB electricity grid. This would relate to the non-commodity costs of Balancing Services Use of System (BSUoS), Transmission Network Use of System (TNUoS) and Distribution Use of System (DUoS)

The increase in current EII exemptions for RO, FiT and CfD would result in a reduction of ~£5/MWh, the 100% exemption from Capacity Market charges would result in a further reduction of ~£5/MWh and finally the introduction of exemptions for network charges further reduces costs by ~£14/MWh. This would mean those firms that qualify are expected to see a reduction in their overall electricity price in the region of £24/MWh above and beyond the savings already available under the existing EII scheme.

There will be a phased approach to the introduction of the new measures. The increase in the existing EII relief to 100% will be introduced first in April 2024 as the provisions are already covered by existing legislation. The Capacity Market Exemption and NCC Scheme are both subject to secondary legislation and statutory approval planned for the Spring of 2024. Subject to approval, the Capacity Market exemption will come into effect in October 2024 and finally, the NCC scheme will begin in April 2025 following the UK Government working closely with suppliers to develop the technical details of the scheme and publish official guidance.

As always, Adalta Energy is here to support your business through the ever-changing landscape. If you have, or think you would qualify for EII, please contact enquiries@adaltaenergy.co.uk or call Ed Butler directly on 07989 431184. Alternatively, if you are an existing Adalta Energy client then please speak directly with your dedicated contact.