Assured Energy Outlook: Issue 22 - July 2018

The government is seeking views on the potential competitive distortions that it believes could have resulted from the current threshold for exemption of 20% electricity intensity. To address any distortions, it has asked whether the threshold should be decreased to 17%, 15% or 10%. Newly eligible businesses would see electricity bills decrease by an estimated average of £2.8mn/ year per business.

However, such a move would create an additional cost burden for those not exempt to cover the funding shortfall. If the 10% threshold is adopted, it was estimated that the average annual bill would increase by £300 for a small business, £12,000 for a medium-sized business and £110,000 for an ineligible energy-intensive industry business. The government is therefore also seeking views on how these additional costs can be minimized for non-eligible consumers as well as how the operation of the exemption schemes can be improved. The consultation closes on 7 September.

Laura Cohen, Chief Executive of the British Ceramic Federation, said the lobby group was “disappointed not to see clearer proposals to benefit UK competitiveness on energy for ceramics and other energy-intensive industries”...read more