Consultation outcome

Implementing an exemption for energy intensive industries from the indirect costs of the RO and the FITs

This consultation has concluded

Download the full outcome

Government response to the Feed In Tariffs (FITs) scheme aspect of consultation

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FITs EII exemption impact note

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Government response to the Renewables Obligation (RO) scheme aspect of consultation

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Impact assessment: exemption from the costs of the Renewables Obligation for Energy Intensive Industries

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Detail of outcome

Government has listened to the concerns of Energy Intensive Industries (EIIs) regarding electricity costs.

The Feed-in Tariffs scheme (published July 2018)

Following consultation, the government intends to implement an Energy Intensive Industries’ exemption in Great Britain for the Feed-in Tariffs scheme by 1 April 2019 or as soon as practically possible after that date, subject to the outcome of the Feed-In Tariffs Scheme consultation and receiving State aid approval.

More detail on how the exemption will be implemented and a summary of responses received to the consultation can be found in the government response.

The Renewables Obligation (published July 2017)

Following consultation, the government intends to implement the exemption in England and Wales for the Renewables Obligation (RO) through changes to the supplier liability mechanism under the RO scheme, subject to Parliamentary approval.

The exemption will not be introduced in Northern Ireland from the outset. The Scottish government has devolved responsibility for setting the RO in Scotland and has published its response to its consultation alongside this government response document. We will respond on implementing an exemption for EIIs from the indirect costs of the FITs scheme in due course.

Further decisions on how we will deliver the exemption and other changes to the operation of the RO can be found in the full government response.

Detail of feedback received

We received 69 responses from interested parties including:

  • EIIs
  • energy suppliers
  • consumer groups
  • non-eligible businesses; and
  • individuals.

We also held two stakeholder events to discuss the proposed changes and one-to-one meetings with interested groups.

Original consultation

Summary

A consultation on implementing an exemption for energy intensive industries from the indirect costs of the Renewables Obligation and Feed-in Tariffs scheme.

This consultation ran from
to

Consultation description

In the Spending Review 2015 the Chancellor set out that “the government will provide an exemption for Energy Intensive Industries, including the steel industry, from the policy costs of the Renewables Obligation and Feed-in Tariffs, to ensure that they have long-term certainty and remain competitive.”

This consultation sets out how the government proposes to implement the exemption. In summary, we propose to:

  • change each scheme so that a supplier’s market share does not include a certain portion of its supply to each (if any) of its eligible EII customers.
  • make the RO and FIT scheme exemption available to the same EIIs that are eligible for the existing RO and FIT compensation scheme and CFD exemption.
  • implement the exemption in relation to the FIT scheme in Great Britain and in relation to the RO in England and Wales. The Scottish government are consulting separately on proposals to implement the exemption in relation to the RO in Scotland.

Subject to stakeholders’ views, state aid approval and Parliamentary approval, if we decide to proceed with the proposals we intend to bring them into effect in April 2017. We will confirm the intended timetable in the government response to this consultation.

Find out the latest estimates of electricity supplied to energy intensive industries eligible for the exemption.

Documents

Consultation on implementing an exemption for Energy Intensive Industries from the indirect costs of the Renewables Obligation and Feed-in Tariff Schemes

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Impact Assessment

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Published 1 April 2016
Last updated 19 July 2018 + show all updates
  1. Government response published
  2. Publication of the government response and impact assessment.
  3. First published.