Detail of outcome
This consultation closed without conclusion due to changes to the EU state aid guidelines. We reconsulted in July 2014 on ‘Electricity intensive industries: relief from the indirect costs of renewables’.
As part of the introduction of the Energy Bill, government is seeking to exempt energy intensive industries (EIIs) from the costs of Contracts for Difference (CfDs). CfDs are part of Electricity Market Reform (EMR). CfDs aim to support investment in low carbon electricity generation.
The Department for Business, Innovation and Skills (BIS) and the Department for Energy and Climate Change (DECC) are working together to define the scope of the exemption. This will include who will be eligible and the mechanism to provide it. This consultation looks at eligibility for the exemption.
We propose, subject to state aid approval, we propose to exempt EIIs from the costs of Contracts for Difference (CfD) where they pose significant risk to UK competitiveness. We are seeking to compensate EIIs that are most at risk, to compensate them for indirect costs of energy and climate change policies, whilst minimising extra costs to other consumers.
We aim to bring the exemption into force, at the same time as the Electricity Market Reform (EMR) is implemented.