Consultation outcome

Proposed uplift to the Network Charging Compensation Scheme for energy intensive industries (EIIs): government consultation response

Updated 31 October 2025

1. Rationale for the consultation

Since 1 April 2024, eligible energy intensive industries (EIIs) have benefited from the British Industry Supercharger: a decisive set of measures to make Britain’s strategic EIIs more competitive and tackle the challenge of carbon leakage. The scheme addresses areas of the domestic energy system which together contribute to higher electricity costs for EIIs than comparable countries. The measures are as follows:

• a 100% exemption from Contracts for Difference, Renewables Obligation (RO), and Feed-in Tariffs (FIT). This came into effect from 1 April 2024

• a 100% exemption from the costs associated with the Capacity Market, which came into effect in October 2024

• compensation for the charges paid for using the Great British electricity grid through the EII Network Charging Compensation (NCC) Scheme. This has been running since April 2025, with compensation backdated to April 2024. Eligible businesses are entitled to apply for compensation for 60% of these costs

A number of businesses and trade organisations have recommended that a higher level of compensation would be needed if the government’s objective was to bring electricity costs for EIIs in Great Britain closer in line with those charged in competitor countries where up to 90% compensation is offered.

As part of the government’s Modern Industrial Strategy, we announced a proposed increase in support for our most energy intensive industries eligible for the British Industry Supercharger package, with an uplift of the NCC Scheme from 60% to 90%. This consultation sought views on this proposal. It also sought views on amending the NCC Scheme application timescales.

2. Summary of the consultation

The consultation was published on 18 July 2025 by the Department for Business and Trade (DBT) and sought views on increasing the level of compensation offered through the NCC Scheme to 90%.

Through the consultation, DBT sought views and evidence from a wide range of audiences, including:

• EIIs (whether currently benefitting or not from the existing British Industry Supercharger)
• other electricity consumers
• trade bodies
• energy suppliers
• other interested parties.

DBT sought views on:

• the proposal to uplift the amount of relief offered through the NCC Scheme to 90%
• the impact of high electricity prices on industrial users
• the proposal to provide NCC Scheme applicants with more time to complete an application

The consultation gave stakeholders an opportunity to provide their views and evidence to the questions posed.

This consultation was available on GOV.UK and was emailed directly to a number of stakeholders who had previously expressed an interest in this issue or could be perceived as an interested party.

The consultation ran for 4 weeks and closed on 15 August 2025. A total of 64 responses were received from stakeholders, including EII companies, business representative organisations, trade associations, energy suppliers and others. Overall, responses represented the views of over 2000 organisations, when taking into account bodies who answered on behalf of multiple members.

All the responses have been analysed and taken into account and this document provides a full government response. Responses captured in this document refer to “respondents”, whereby each individual response submitted has equal standing, regardless of whether this was received on behalf of a trade body or an individual company. 

This government response sets out the proposed policy change to increase compensation to EIIs who meet the eligibility criteria from a portion of the costs that is associated with the use of Great Britain’s electricity network.

3. Policy executive summary

This section sets out a high-level summary of the policy positions taken in this consultation response.

The government commits to uplifting the level of relief offered through the NCC Scheme to 90%. This uplift in relief, which will be provided for in legislation, will be dated from 1 April 2026.

The government also commits to extending the length of each NCC Scheme application window to 2 months. Given this change will require amendments to legislation, the extension of the application windows will take effect from the Q2 2026 application window opening on 30 June 2026.

4. Evidence from the consultation

In summarising the responses received to each question:

• “most” or “many” indicates more than 70%
• “the majority” indicates more than 50%
• “some” indicates between 30% and 50%
• “a few” represents less than 30% of respondents.

When considering the summaries of responses, note that:

• this summary does not seek to exhaustively capture all views expressed, but to summarise key themes and particularly notable points of feedback within responses
• respondents used either an online response portal or sent their responses by email
• not all respondents answered every question

The government engaged closely with directly concerned parties throughout the consultation period to explain and clarify the proposals. Views expressed during these events are not captured in this response. However, we have factored these into our decision making and next steps.

5. Proposed timeline for implementation

In accordance with the commitment included within the Modern Industrial Strategy to deliver the uplift by 2026, the government confirms that the increase in compensation offered through the NCC Scheme to 90% will take effect from 1 April 2026. This means that any EII who submits a claim during the Q2 2026 application window (and subsequent application windows) can expect that claim to be eligible for 90% relief.

To cover the costs of the NCC Scheme uplift, the EII Support Levy (ESL) will be increased from 1 April 2027, with electricity suppliers being provided a 6-month forecast of the increase in costs in October 2026. EIIs who submit a Q2 2026 claim can expect to receive the uplifted compensation after April 2027.

During the consultation phase, the government engaged with energy suppliers on wider issues not directly covered by the consultation questions. These discussions were followed up in written responses, where suppliers highlighted a number of considerations regarding how the proposed uplift to the NCC Scheme would be implemented.

A common theme was the timing of the change and how costs would be recovered. Several suppliers noted that applying the uplift in the ESL before 2026 could present difficulties, particularly where they had already sold fixed contracts for that period and were unable to adjust prices retrospectively. They suggested that bringing the change into effect from April 2026 would provide a more practical timeframe, giving suppliers the ability to incorporate the increased levy into their pricing, update systems, and communicate with customers in advance. Some respondents indicated that a lead-in period of 18 months would be needed to manage this efficiently.

Suppliers also raised concerns about the possibility of retrospective application, noting that applying the uplift to past periods would make cost recovery more challenging and could create uncertainty in the market. Linked to this, a number of respondents asked for greater clarity on when the 90% uplift would apply and how the costs would flow through to customers, stressing the importance of certainty for planning purposes.

Several suppliers commented on the transparency of costs in the consultation. They felt that further detail on the potential impacts, including how the uplift would be funded and the extent to which ineligible customers might be affected, would be helpful. Some internal forecasts suggested that non-EII customers could face higher costs, though the scale of this was uncertain. It was suggested that the government may wish to consider whether additional support for other business groups would be appropriate.

In addition, suppliers highlighted the way in which the ESL is currently recovered, based on historic market share. They observed that this approach can create distortions, particularly for suppliers whose customer base is changing, and suggested that basing recovery on market share at the time of levy collection might reduce such effects.

Finally, a few suppliers noted that increasing compensation for EIIs could reduce incentives for them to participate in flexibility markets, especially if future charging reforms increase the share of variable network costs, and suggested this potential impact should be further assessed.

The government has noted these concerns raised by the supplier community and has committed to uplifting the relief offered through the NCC Scheme from April 2026 to provide energy suppliers with 18 months’ notice from the point of publication of this response to prepare for the uplift in the levy. This would mitigate any distortive impacts on the energy supply sector that might arise from an earlier implementation of this policy.

The government intend to lay a Statutory Instrument in early 2026 which will make the necessary amendments to the legislative underpinning of the NCC Scheme. The changes will take effect from April 2026, subject to parliamentary approval.

6. Government response to the consultation questions

6.1 Network Charging Compensation Scheme 90% compensation uplift

Question 1: Do you agree with the proposal to raise the level of compensation from 60% to 90%?

Consultation response

Most respondents who explicitly addressed this point (over 85%) supported the proposal. They agreed that increasing the level of support would better align with the objectives of the Modern Industrial Strategy by bringing electricity costs closer to those faced in competitor countries, thereby supporting industrial competitiveness and helping to avert carbon leakage or the movement of production overseas.

A smaller number of respondents raised concerns about potential impacts on ineligible non-domestic customers, calling for greater clarity around the government’s statement that the measure would be funded by “bearing down on costs in the energy system.” These respondents requested confirmation that this would not lead to an increase in the ESL.

A few respondents did not support the uplift to 90%, preferring to maintain the current 60% level of support. They suggested that any additional revenue generated should instead be directed towards supporting a broader range of businesses and industries.

Government response

The government notes the support from the majority of respondents who agree that the level of compensation should be increased to 90%. The government confirms it will increase the level of relief offered by the NCC Scheme to 90%.

The government recognises the impact of high electricity prices on energy intensive sectors, and confirms that it will increase the level of relief offered by the NCC Scheme to 90%. The government also recognises that there is a need to balance this with the constraints of the electricity supplier market within Great Britain to accommodate any uplift in relief to be recovered by the existing funding mechanism, the ESL.

Therefore, the government commits that the uplift in relief offered by the NCC Scheme will take effect from 1 April 2026. This means that any eligible network charges incurred by a recipient of the British Industry Supercharger will be eligible for 90% compensation from 1 April 2026. Given the NCC Scheme provides compensation 12 months in arrears from costs being incurred, eligible EIIs can expect their first uplifted compensation payments after April 2027.

Impact on other energy users

The government will bear down on costs across the energy system to ensure that domestic and non-domestic energy consumers do not see a net increase in their electricity bills as a result of this measure.

In October 2025, the Department for Energy Security and Net Zero (DESNZ) published consultations seeking views on proposals to amend the inflation indexation of the RO and FIT schemes. Lowering levy costs through reforms such as these will support wider UK government priorities, including efforts to reduce industrial electricity prices. The Industrial Strategy, launched in June 2025, set out a series of electricity price relief schemes, with a commitment to fund these through reductions in levies and other energy system costs. The proposals in the indexation consultations, if implemented, could contribute to that goal.

The government does not propose any modification to the existing funding mechanism to the NCC Scheme. Therefore, the costs of the NCC Scheme will continue to be recovered via the ESL. The government recognises that licenced electricity suppliers employ a number of different strategies to recover the costs from their customer base. As before, the government does not prescribe how suppliers recover these costs from their customers. Therefore, the decision to uplift the relief offered by the NCC Scheme from 1 April 2026 would provide suppliers with sufficient notice to prepare for the corresponding uplift in the ESL in April 2027.

To support suppliers with the modelling of the gross costs of the uplift, DBT has prepared the following estimates on the cost of the uplift for other energy users. These additional costs will be offset by measures taken by DESNZ to reduce electricity bills as outlined above.

Households

Without any offsetting measures, households will face an additional £1 to £2 per year on average to their electricity bills from the uplift in Network Charging Compensation. Combined with the cost of the other Supercharger measures delivered from 2024, this will total £5 to £7 per year.

Non-domestic consumers

Without any offsetting measures, non-domestic consumers will face an additional £0.40/MWh on their electricity bills from the uplift in Network Charges Compensation. Combined with the costs of the other Supercharger measures delivered from 2024, this will total £1.70 to £2/MWh.

Examples of how this uplift alone will impact on types of ineligible non-domestic consumers are shown in Table 1. The impacts of the existing Supercharger measures are also included in Table 1.

Table 1: Electricity bill impacts of uplift from 60% to 90% Network Charges Compensation on example ineligible non-domestic firms

Case studies - impact of 90% uplift	Electricity annual consumption (MWh)	Size	2025 electricity bill estimate for year (£)	Additional bill increase per year (£)	Percentage increase over year	Existing Supercharger bill increase per year (£)
Pub	48	Micro	£7,300 to £9,300	£19	0.2% to 0.3%	£53 to £72
Manufacturer	2,400	Small	£270,000 to £370,000	£960	0.3% to 0.4%	£2,640 to £3,600
Retailer	12	Micro	£1,800 to £2,300	£5	0.2% to 0.3%	£13 to £18
Law firm (office based)	96	Large	£12,500 to £16,400	£38	0.2% to 0.3%	£106 to £144

Source: Q4 2022 DESNZ price and bills projections. The model assumes a high net zero ambition, a central fossil fuel price and a high ETS price and is just one of a range of forecasts for 2025.

Question 2: Do you have any further evidence from your sector to support raising the level of compensation above 60%?

Consultation response

The majority of respondents either provided no additional evidence or endorsed the analysis set out in the consultation document. These respondents generally agreed that the current 60% compensation has been successful in narrowing the gap between UK electricity prices and those in competitor countries. They argued that increasing the rate to 90% would go further towards closing this disparity, making the UK a more attractive place for investment, supporting reinvestment by existing operators, and giving manufacturers greater confidence to expand operations domestically.

Some respondents used this opportunity to call for the eligibility of the scheme to be widened beyond the sectors and businesses currently covered. They argued that other parts of the economy also face high electricity costs and play a critical role in maintaining the UK’s industrial base, supply chains, and contribution to GDP. In their view, broadening eligibility would provide more balanced support across the economy, ensuring that competitiveness is not concentrated only within a narrow set of industries. Respondents who took this view often provided evidence of the importance of their sectors to UK output, exports, and employment, and suggested that extending eligibility would help secure investment and jobs.

A few respondents noted that even with the uplift to 90%, electricity prices in the UK are still expected to remain higher than those in some competing jurisdictions, such as Texas. They underlined that energy costs continue to be a primary concern for UK manufacturers and remain a significant factor in investment decisions.

A small number of respondents also called for greater transparency around the scheme itself. They suggested publishing anonymised data on the number of businesses currently accessing the scheme, broken down by subsector, together with the overall cost of the package to other non-domestic consumers. This, they argued, would provide more clarity on the distribution of costs and benefits.

In addition, some respondents proposed that government publish forward-looking projections, covering 5 to 10 years, of expected charges and cost estimates to support long-term business planning. A few also suggested that the funding model could be adjusted to distribute costs more evenly across the energy system, for example by aligning recovery more closely with net zero goals and considering contributions from non-renewable sources such as gas.

Government response

The government welcomes the acknowledgement from the majority of respondents that by increasing level of compensation to 90%, the government would be helping to close the electricity price gap with competitor countries and support critical British foundational manufacturers.

The government notes that a number of respondents have called for an expansion of the British Industry Supercharger by broadening its eligibility. The government has committed to conducting a refresh of the underlying eligibility data of the British Industry Supercharger in 2026. This will provide an opportunity to reassess the eligibility of manufacturing sectors who can access the Supercharger, based on their up-to-date electricity and trade intensity.

The government notes that some respondents have requested greater transparency on the costs of the scheme on other non-domestic users. The government response to Question 1 provides a breakdown of the projected cost of the uplift on other non-domestic users, including models of the forecasted costs for different non-domestic user archetypes.

The government acknowledges that a number of respondents proposed modifying the funding model to either redistribute costs more evenly across the system or aligning it with other government objectives. However, the government does not currently propose any modification to the scope or design of the ESL. When the NCC Scheme and its funding mechanism were first designed in 2023, a decision was taken, following consultation with stakeholders, that a volumetric calculation was most equitable to balance the costs between domestic and non-domestic electricity consumers, as opposed to a meter-point calculation. The government is still of the view that a volumetric calculation remains the most suitable means of balancing the costs between different electricity users.

6.2 Applications

Question 3: Do you agree with the proposal to extend each application window to 2 months?

Consultation response

Most of the respondents (over 90%) agreed with the proposal to extend each application window to 2 months. They argued that a longer window would give applicants greater flexibility to gather the required data and reduce the risk of errors or the need for revisions. Respondents also noted that the change would help suppliers and administrators by making cost forecasts more predictable and transparent.

Support for the proposal was particularly strong among sectors where eligible recipients are relatively small businesses, with respondents emphasising that the additional time would ease what can otherwise feel like a significant administrative burden. Others noted that the extension would help accommodate delays outside of EIIs’ control, such as when information from suppliers is not provided in time, thereby reducing pressure to submit incomplete applications.

A smaller number of respondents suggested that the application window should be extended beyond 2 months. They argued that a longer period would go further in alleviating administrative pressures and provide applicants with additional certainty.

Government response

The government recognises the need to provide EIIs with more flexibility with the NCC Scheme application windows. The government agrees to extend the application windows to 2 months. Given the length of the application windows will need to be amended by legislation, the government plans that the extension will take effect from the Q2 2026 application window opening on 30 June 2026. The application windows for Q3 and Q4 2025, along with the Q1 2026, will still be limited to one month in length.

7. Conclusion and next steps

Following the conclusion of this consultation, the government intends to take forward the proposed measures to increase the level of compensation to EIIs for a portion of their network charges, based on existing eligibility criteria outlined in the consultation which will apply to the full package of measures.

The government intends to lay a statutory instrument in early 2026 which will take effect from April 2026, subject to parliamentary approval and completion of subsidy control procedures.

All secondary legislation is subject to publication of a full impact assessment, which is scrutinised by the Regulatory Policy Committee. We expect this to be made public in early 2026 to accompany the Statutory Instrument.

We continue to work across government departments to ensure that strategically important EIIs are considered in other policy development, and we will continue to explore alternative policy options to support the sector.