Energy intensive organisations to receive compensation for network charging costs
The government has published details of a new EII Network Charging Compensation (NCC) Scheme – which will reimburse energy intensive users (EIIs) for charges paid to use the GB electricity grid.
It forms part of the “British Industry Supercharger” – a package of measures to support EIIs, announced by the government in February 2023. The NCC will allow energy intensive end users to claim back 60% of eligible network charging costs.
Eligibility for the NCC Scheme
Eligibility for the NCC Scheme is contingent upon an EII holding a valid EII Exemption Scheme certificate. This is issued by the government to eligible EIIs to demonstrate they qualify for the EII Exemption Scheme, and the other British Industry Supercharger measures once these schemes commence.
It will be funded via a new “EII Support Levy” placed on licensed suppliers. Compensation will be paid out to EIIs in arrears once the funds have been raised via the Levy. EIIs will be required to provide evidence of the network charges they have incurred, which will be used to calculate the necessary obligation to be raised from suppliers via the levy.
Network costs incurred by an EII in April 2024 will be compensated in 2025, after the necessary funding is raised via the Levy.
Certain elements of scheme design require input from the scheme administrator. Once appointed, government will work with them to determine whether quarterly compensation payments work, or whether a more regular cycle that tracks the monthly levy collection would be more feasible. In any event, the burden to EIIs in terms of supplying evidence of costs incurred will be on a quarterly cycle. At the latest, EIIs could expect their first compensation payment to be made at the end of the first quarter after the commencement of the Scheme.
If you would like advice on whether you are eligible for NCC support, or for help securing other support measures for energy intensive industries, get in touch.