Changes to EII Compensation Scheme

Changes are set to be introduced to the compensation that Energy Intensive Industries (EIIs) receive to help manage their energy costs.

Summary of the Changes

The British Industry Supercharger (BIS) scheme is a set of measures to help make Britain’s Energy Intensive Industries (EIIs) more competitive across Europe. As part of the scheme, there will be additional compensation for EII’s non-energy costs and a new non-energy cost is being introduced. Both could be implemented on the 1st April 2024.

Green Levies

Currently EIIs receive discounts on the following non-energy costs:

  • RO (Renewable Obligations)
  • FiT (Feed-in Tariff)
  • CfD (Contracts for Difference)

The discounted rate of 85% is set to increase to 100% relief, whilst for the first time EIIs will also receive a discount on the CMSC (Capacity Market Supplier Charge) costs, again at the level of 100% relief.

EII participants using 10GWh a year can expect an additional saving of approximately £70,000.

Network Costs

Additionally, 60% of EIIs network costs are also set to be covered under the BIS scheme. These costs include:

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

EII Support Levy

To fund these discounts the new Energy Intensive Support Levy will be charged by suppliers on a p/kWh basis.

Increases to the relief received for non-energy costs alongside compensation for networks means that no EII consumers will see an increase to the £/MWh rate they are charged, with non-domestic consumers predicted to see an increase of £1/MWh.