Network Charging Compensation Scheme For Energy Intensive Industries
Tuesday, 9 July 2024
The government will provide eligible Energy Intensive Industries (EIIs) in Great Britain with 60% compensation on their electricity network charging costs from April 2024, this aims to offer comparable support to that offered by certain EU states. Germany, France and Netherlands all offer up to 90% exemptions to EIIs on their network charging costs.
The network charges eligible for compensation are:
- Transmission Network Use of System(TNUos), including annual connection charges and transmission losses
- Distribution Use of System (DUoS), including annual connection charges and distribution losses in this context
- Balancing System Use of System (BSUoS)
The commencement of the Network Charging Compensation (NCC) Scheme from 1st April 2024 aligns with the uplift in the EII Exemption Scheme (an exemption from the indirect costs of funding the costs of renewables e.g. CfD, RO, FiT) from 85% to 100%. Any energy intensive installation eligible for 100% exemption from the costs of renewables from 1st April 2024 is also eligible to apply for 60% network charging cost compensation on 100% of the electricity passing through the relevant meter.
A new online portal for the Network Charging Compensation (NCC) scheme allows companies with Energy Intensive Installation (EII) Certificates to apply for a 60% discount on the cost of network charges on their electricity bills. Eligible companies should make a claim for the network charges incurred during April to June 2024 between 12 July and 30 August 2024. The compensation payments for eligible companies will begin in May 2025. The government will require EIIs to submit 3 months of network charging data 4 times a year once the scheme is in operation.
The Network Charging Compensation (NCC) portal found here will be operational from Friday 12 July 2024.
Elexon, who will be administering the new scheme, and the Government will be contacting companies that are eligible for the network charges discount from July 2024. Following the initial claims for April to June 2024 Elexon will publish an estimate of the total levy being claimed on 1 October 2024, and following this invoice electricity suppliers for the costs of the compensation scheme from April 2025, the amount each supplier pays will be determined by their market share. This is expected to add £3 to £5 annually to the electric bills for household consumers and £1/MWh to the bills of non-eligible non-domestic consumers.
GOV.UK British Industry Supercharger Network Charging Compensation scheme
Energy Intensive Industries (EIIs): Guidance for applicants seeking a certificate for an exemption
