Energy Intensive Industry (EII) scheme
To help the UK meet its low carbon targets, the Government has introduced policies to reduce greenhouse gas emissions by incentivising increases in renewable energy.
The effect of these policies resulted in an increase in retail electricity prices and contributed to a cost disadvantage between Energy Intensive Industries (EIIs) in the UK and other countries, which could potentially make UK EIIs less competitive.
What are EIIs?
EIIs include sectors such as steel, engineering and heavy manufacturing where energy usage makes up a significant proportion of production costs.
The Government has a full list of designated EIIs and guidance on how companies from within these sectors can apply here.
What is the EII scheme?
As a result, in 2015 the Government announced an exemption (up to 85%) from the policy costs of the Renewables Obligation (RO) and Feed-in Tariffs (FiTs) schemes for qualifying EIIs. This exemption reduced the impact of renewables policies on the costs of electricity to ensure that EIIs remain competitive internationally.
EIIs can claim exemption from Contracts for Difference FiT (CfD FiT) and RO charges due to changes in industry regulation. Exemption from the CfD FiT scheme began in November 2017, and RO exemption began on 1 April 2018.
State aid approval for EII exemptions from the cost of the FiT scheme is under the approval process. Further clarification will arrive in due course, however EIIs are still currently entitled to compensation from the FiT scheme.
What do I need to do if my business qualifies for relief from FIT and RO via the EII scheme?
If your business qualifies and you wish to take advantage, you will be required to forward proof of your EII exemption to Opus Energy at the point of tendering. We will take care of the rest.
What does this mean for businesses in non-EIIs?
Most businesses do not qualify for CfD FiT, RO and FIT relief via the EII scheme, but it will affect their prices as the relief will be paid for by all non-EII electricity users.
Businesses that are priced with fixed CfD FiT, RO and FiT rates using preferential agreements will see no change to prices.