Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
A new scheme will see hundreds of energy intensive industries across Britain receive a discount on their energy bills.
The new initiative will be administered by Elexon and forms part of the government’s British Industry Supercharger scheme which includes a series of targeted measures to bring energy costs for key industries in line with other major economies.
It is designed to level the playing field for British businesses, with Ofgem analysis showing that between 2016 and 2020, bills for energy intensive companies in Britain were 50% higher than their competitors in France and Germany.
Under the scheme electricity suppliers will fund a 60% discount on the Transmission Network Use of System, Distribution Use of System and Balancing System Use of System charges.
Elexon and the government will contact companies that are eligible for the network charges discount from July 2024.
Elexon will then invoice suppliers for the total costs of the compensation scheme from April next year, with the amount each supplier pays determined by their market share.
The compensation payments for eligible companies will begin in May 2025.
Elexon chief executive Peter Stanley said: “By delivering the network charges discount for energy intensive companies, Elexon will be playing a key role in the government’s plans to support investment in a low carbon future. It will also provide a greater incentive for electric vehicle and battery manufacturing in the UK, and help these companies to compete on a more level playing field with similar businesses across Europe.
“Elexon is pleased to be playing an increasing role as a trusted delivery partner for government. Administering the network charges discount complements the roles we already play in calculating, collecting and distributing payments for the Contracts for Difference and Capacity Market schemes, incentivising investment in a net zero economy while maintaining energy security.”
According to the government, around 370 businesses employing 400,000 skilled workers are set to benefit from lower costs as a result of the British Industry Supercharger.
The support will be made available to sectors including steel, metals, chemicals, cement, glass and paper, and is expected to be worth between £320 million – £410 million in total savings to UK businesses next year.
Commenting on the measures trade secretary Kemi Badenoch said: “This government is backing British industry, and with this unprecedented energy support we’re levelling the playing field for hundreds of businesses in steel, chemicals and other key sectors.
“Energy-intensive industries are vital to our economy. The announcement today will ensure that the UK remains an attractive investment destination and support thousands of high-skilled jobs across the country.”
Please login or Register to leave a comment.