Regulation update: the latest on EII exemptions

By Martin Pearce | Posted November 03, 2017

Many businesses have been waiting some time for the arrival of the Electricity Intensive Industries (EIIs) Exemptions to the Contracts for difference (CfD), Renewables Obligation (RO) and Feed-in Tariffs (FiTs) schemes. It looks like the wait is nearly over.

Parliament is in the process of debating the Electricity Supplier Obligations (Amendment and Excluded Electricity), which would enable the CfD exemption to start, so it’s quite likely that this exemption will start within the next few days.

The exemption to the RO on the other hand is awaiting legislation to be laid before Parliament, with the Government’s ambition being a January 2018 start date. However, to have achieved this the necessary legislation and a revised obligation level would need to have been completed by the end of October.

Failing that, the government has set a four-month lead in time. This would mean if they publish before the end of November the exemption will start in March, after that the exemption will have to wait until the 2018/19 compliance year. Given everything else that is going on in the political space it is difficult to know how soon this will all happen.

The FiT exemption is even less certain. Government has been in discussion with the European Commission for approval of the State Aid case for this exemption – already received for the other two exemptions. However, there is no sign of that happening anytime soon, and the fact that Government has yet to decide what happens to the FIT scheme after 2019 (when the current FiT Tariffs end) may even be holding up proceedings.

But what does this mean for your business?

Well if you think you might qualify as an EII it would be worth getting in contact with the Department for Energy Security and Net Zero (DESNZ) now to find out. For guidance and more information you can read their publication on their draft guidance on the CfD exemption.

If you are not an EII, as most businesses won’t be, then make sure you ask your supplier about how they are factoring in the costs of the scheme into your prices. Find out if you qualify, and view guidance on applying.