As part of the government’s efforts to ensure the competitiveness of the UK’s largest energy consuming industries against parallel industries in other nations, the UK government has introduced compensation for the impact that increasing energy costs can have on their productivity, particularly the impact of costs from renewable policies, such as non-commodity costs like Renewable Obligations (RO), Feed-In-Tariffs (FITs) and Contracts for Difference (CfD).
Compensation is now available of up to 100% RO, FITS and CfD charges, alongside this up to 100% may be possible on the Capacity Marker Supplier Charge (CMSC). 60% of network charges (Balancing Services Use of System, Transmission Network Use of System & Distribution Network Use of System) are also now covered under the British Industry Supercharger scheme.
Who is Eligible?
There are two factors to consider when assessing eligibility:
- Eligible businesses must manufacture a product in the UK within an eligible sector (defined by 4-digit NACE code, similar to the SIC code).
- The business (aggregated business level – whole legal entity) must pass the 20% electricity intensity test. To satisfy the business intensity test, businesses will need to show that their implied mean electricity costs amount to 20% of their mean Gross Value Added (GVA).
To calculate the 20% electricity intensity test financial data from the three (3) more recently audited business.
How Does the Scheme Work?
The key information required to assess the amount of compensation due relates to the reference period of the last three business financial years. There are four processes which need to be undertaken by claimants:
- Initial Claim- Completed at the outset, forms the basis of decision for eligibility and calculation of compensation
- Quarterly Declaration- Confirms that circumstance are largely unchanged or notifying on significant changes in level of electricity usage. This declaration prompts the quarterly payment and should avoid unnecessary under/overpayments
- End of Year Report- Sets out annual total for the electricity consumption and auto-generation information at installation level and the electricity consumption and output at product level
- Maintenance- Continual maintenance of evidence pack for auditing purposes
LGE’S EIIC Service
LGE provides the following services for clients who qualify:
- Evaluation of your eligibility
- Calculate the 20% electricity intensity test
- Identify eligible and non-eligible electricity meter points
- Assessment of production volumes
- Completion & submission of application
- On-going submission of quarterly declarations and annual returns
- Manage any aspects and changes to a client’s portfolio or the scheme
- Provision of audit services to ensure compliance with the scheme validation process and maintenance of the evidence pack
- Provision of advice in aspects of demand management and energy reduction opportunities
If you believe you qualify for EII compensation then speak to your account manager today or contact us at info@lgegroup.com.