As part of its commitment to meeting climate change targets and building a sustainable energy future, the Government is currently investing heavily in renewable energy generation.
From 1st April 2018 additional third party costs, in the form of the RO (Renewable Obligation) and CfDs (Contacts for Difference) may be applied to your electricity invoices as the cost of this generation is passed on to consumers.
Some suppliers may already have included these charges in your contracts and in that case you will not be affected. But if the charges do apply to you (and suppliers will be contacting you directly to confirm if this is the case), you may qualify for up to 85% exemption on RO and CfDs under the Energy Intensive Industries legislation. In addition, you may be able to apply for compensation for Feed In Tariff charges (FiTs) previously applied.
An Energy Intensive Industry is a UK company whose electricity costs make up a significant proportion (20% or more) of their overall annual Gross Value Added (GVA). To qualify for exemption your company must pass the 20% business level test together with the sector level test, i.e. manufacture a product in the UK within an eligible sector.
For businesses with three or more years of published annual records, after Jan 2012, the reference period will be the last 3 consecutive years.
For businesses with two years published annual accounts, after Jan 2012, the reference period will be 2 consecutive years.
For businesses with one year published accounts, after Jan 2012, the reference period will be one year.
A business that does not yet have any annual accounts & has been trading for 21 months or less can apply. The reference period in this circumstance will be the period for which they have been carrying out a specified activity & have financial data in the 12 months prior to making an application, which must be at least 6 months.
Click here for more information from the Government website, including a list of eligible sectors.