Energy Intensive Industry exemptions

Three-way support

The UK government wants to make energy prices for EIIs more cost competitive with those in Europe. It announced several measures as part of the British Industry Supercharger package back in February 2023 and the details are now clearer. There are three prongs to this support:

• An increase to the EII Renewable Levy Exemption scheme
• A new, full, indirect exemption from the costs linked to the Capacity Market
• A new EII Network Charging Compensation Scheme

We’re focusing on the last of these measures (and summarise the other two schemes at the end).

EII Network Charging Compensation Scheme

From April 2025, eligible EIIs can receive a 60% exemption from the following Third Party Costs (TPCs) related to using the GB electricity grid:

• Distribution Use of System (DUoS)
• Transmission Network Use of System (TNUoS)
• Balancing Services Use of System (BSUoS)

This relief is based on how much an EII paid towards these charges in the previous year. So, for example, an EII will be eligible for compensation in 2025 for the EII Network charging costs incurred in 2024. To receive this relief in 2025, an EII will need to provide quarterly evidence to the government showing how much it paid towards these TPCs during 2024.

EIIs can do this by providing copies of their energy bill, which we support by sending bills regularly and providing access to billing records via our customer portal.

What updates are on their way?

Elexon will soon be engaging with EIIs on how they can submit their applications. From the afternoon of 12 July 2024, EIIs can access Elexon’s system at ncc.elexon.co.uk to register and submit quarterly evidence (covering April 2024 onwards). Elexon should also be able to provide guidance and supporting documentation to show EIIs how to do this. Further information included a webinar run by Elexon on 8 July and updated guidance on claiming for eligible costs published by government.

From October 2024, Elexon will calculate and publish the estimated levy amounts for suppliers for each quarter.

From March 2025, Elexon will have the functionality to calculate each supplier’s levy, operational costs and reserve amounts – as well as produce credit notes for EII applicants.

What about the other support on offer?

The increase in EII Renewable Levy Exemptions – from 85% to 100% – has been in place from April 2024. It has an impact on the following TPCs: Renewables Obligation, Contracts for Difference, and Small-Scale Feed-in Tariff.

The legislation for the new, full, indirect exemption from the costs linked to the Capacity Market has also come into force. The exemptions will align with the new Capacity Market Delivery Year (October to September).

We’re committed to being a consultative energy and decarbonisation partner. So we’re supporting our EII customers in understanding the steps they need to follow to be eligible for compensation.

If you’d like to know more, please get in touch.