Energy Intensive Industries: Impact on Care Providers

To ensure the UK meets its low carbon targets, the Government has introduced several policies that are driving renewable growth. However, they’ve also increased the cost of electricity and made UK prices higher than in other countries.

To help Energy Intensive Industries (EIIs) in the UK compete with their EU counterparts, the Government suggested they should be exempt from some Third Party Charges (TPCs). The cost of the exemption would be paid for through an increase in costs for non-EII businesses.

Power Direct ask how much this is costing you and what is the impact on your business,

What is the Energy Intensive Industries (EII) exemption costing your business?

In an effort to meet low carbon targets, the government has introduced several policies that are aimed at reducing greenhouse gas emissions by incentivising increases in renewable energy. This has had the effect of driving up retail electricity prices, which in turn, has put pressure on UK businesses to remain competitive with those in other countries that are paying lower energy bills.

In response, the government introduced a scheme to reduce the cost of energy for businesses classed as Energy Intensive Industries (EII), in a bid to ensure that UK businesses can remain competitive. It meant that EIIs should be exempt from the costs of the Renewable Obligations (RO) scheme, the Contracts for Difference (CfD) scheme and the Feed in Tariff (FiT) scheme.

The businesses qualifying for the EII exemption are those where energy usage makes up a significant part of production, such as those within steel, chemicals, engineering and brick-making industries.

What does it mean for your business?

Earlier this month, the government announced that it is now considering widening the eligibility for the current EII exemption.

The proposed changes would mean more British businesses benefiting from a reduction in their energy bills.

But if you’re not one of those qualifying businesses, what impact will it have?

Most businesses won’t be eligible for the EII exemption. It means that, as with the current scheme, these businesses will face higher costs for their energy, in order to subsidise the scheme.

What can you do to minimise the impact?

In order to keep rising energy costs in check, you might find that you will benefit from a fully-fixed, fully inclusive contract that looks to take into account future regulatory and non-energy cost changes. This means you can be confident your costs will remain fully-fixed for the entire period of the contract, and you won’t get any unwelcome surprises along the way!

Next steps

For an informal discussion about the best energy solution for your business, call Power Direct Ltd’s friendly team of energy consultants on +44 (0)1452 347 549

 

 

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