Regulatory Updates - Smarter Business

BEIS Widen Eligibility Criteria for Energy Intensive Industries

The Department for Business, Energy and Industrial Strategy (BEIS) have launched a proposal to expand upon the eligibility criteria for energy intensive industries (EIIs). This would exempt more businesses from indirect costs incurred by renewable electricity support schemes. This initiative is intended to improve competitiveness across Europe as renewable support schemes contribute to high energy prices within the UK.

Energy intensive industries are currently are exempt from certain renewable energy support schemes. The current criteria are based on 20% electricity intensity and are industry-specific. The revised scheme offers an exception for up to 85% of:

  • Contract for Difference (CFD), effective from 31st October 2017;
  • Renewable Obligation (RO), effective from 1st April 2018;
  • Feed in Tariff (FITs), proposed for implementation on 1st April 2019

The proposal queries whether the qualification threshold should be reduced to as low as 10% as a means to address potential market distortions. Moreover, this proposal asks whether the scheme ought to be developed to include more industrial businesses.

The proposed changes are expected to take place as follows:

  • CFD could not be implemented before April 2019;
  • RO could not be implemented before April 2020;
  • FIT date to be estimated if and when EII exemption is implemented in this scheme

Consultations on this topic close on the 7th of September 2018. For more information, refer to – https://beisgovuk.citizenspace.com/im/widening-eligibility-for-eii-industries/