Download the full outcome
Detail of outcome
Government has listened to the concerns of Energy Intensive Industries (EIIs) regarding electricity costs. Following consultation with stakeholders, the government intends to implement the exemption in England and Wales for the 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 FIT 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:
- energy suppliers
- consumer groups
- non-eligible businesses; and
We also held two stakeholder events to discuss the proposed changes and one-to-one meetings with interested groups.
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.