As part of the government’s efforts to decarbonise energy, non-commodity charges such as Renewable Obligations (RO), Feed-in-Tariffs (FiTs) and Contracts for Difference (CfD) were introduced to promote renewable electricity generation. However, these measures increased electricity prices impacting the competitiveness of the UK’s most energy intensive businesses against their European counterparts. To reduce costs and keep UK’s most energy intensive industries competitive, the EIIC scheme was introduced to offer compensation on their non-commodity costs.
Since April 2025, compensation has also been available on network charges such as Balancing Services Use of System (BSUoS), Transmission Network Use of System (TNUoS) & Distribution Network Use of System (DNUoS) which again are non-commodity charges impacting the competitiveness of energy intensive users.
LGE has been providing support to clients to obtain compensation for many years, helping to enhance future operational efficiency. This includes a plastics manufacturer which has been a client of LGE’s since 2020.
Identifying Eligibility:
- LGE identified the client as potential candidate for compensation through the EIIC.
- To satisfy the eligibility requirements, LGE gathered and analysed the financial data from the client’s three most recently audited financial statements, including EBITDA & staff costs, alongside total electricity consumption data for the same period.
- LGE’s rigorous assessment ensured that all necessary information was accurately compiled and submitted to the Department for Energy Security & Net Zero in a timely manner.
- Ensuring all relevant information was submitted confirmed the client’s participation in the scheme and that it would receive compensation on non-commodity charges.
Savings Made:
- Participation in scheme has meant the client now receives discounts of up to 100% on RO, FiT & CfD charges. This has allowed the client to make annual savings of £432,456.
- Since April 2025, the client has also received compensation of 60% on BSUoS, TNUoS & DNUoS charges which equates to an annual saving of £120,000. With the compensation for network charges set to increase to 90% from 1st April 2026, this figure will further increase.
- Taken together, LGE’s support and analysis has enabled the client to make annual savings of £552,456.
Benefits of Participation:
- Savings have provided a significant boost to the client’s operational efficiency and cost structure.
- Strengthened the client’s competitive position in its market and help improve its financial stability.
- Improvements in long-term operational efficiencies.
- Protection against increases in non-commodity charges.