From this month (April 2024) Elexon will be administering a new scheme for around 340 energy intensive industries in Great Britain, to compensate them for the cost of network charges on their electricity bills.
The scheme is one of three measures that have been introduced under the Government’s British Industry Supercharger scheme, which aims to further increase the competitiveness of British companies in Europe and support the development of the green economy in the UK.
Britain’s energy intensive industries face the steepest electricity bills in Europe
In recent years, Britain’s energy intensive industries have faced the steepest industrial electricity prices in Europe, even with existing Government measures to support them.
Analysis by Ofgem shows that between 2016 and 2020, bills for energy intensive companies in Britain were 50% higher than their competitors in France and Germany.
The Government says the new measures will ensure that the energy costs for key industries are in line with other major economies around the world.
60 per cent discount on network charges for eligible companies
Elexon will be delivering a 60 per cent discount for these companies on the Transmission Network Use of System, Distribution Use of System and Balancing Services Use of System charges.
The discount provides an incentive for green economy industries
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 compliments 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.”
The discount will be available to eligible companies from April 2025
Elexon and the Government will contact companies that are eligible for the network charges discount from July 2024.
Elexon will then invoice electricity Suppliers for the total costs of the compensation scheme from April 2025. The amount each Supplier pays will be determined by their market share. The compensation payments for eligible companies will begin in May 2025.