Electricity Intensive Industries (EIIs) exemption to Renewable Obligation (RO) costs will go live from 1 April 2018

We wanted to share the latest update on the revised RO level for 2018-19, published by TheDepartment for Energy Security and Net Zero (DESNZ) yesterday, confirming that the exemption to some costs for EII customers will start from 1 April 2018. 

What this means

EII businesses can now apply to DESNZ for a certificate that will exempt their supplier from up to 85% of the costs of both RO and CfD.  It is expected that suppliers will pass on that saving to the EII customer.  However, non-EII customers will see a rise in costs as a result.

The publishing of the revised RO level for 2018/19 confirms the 1 April 2018 start date for the RO.  The exemption for the Feed-in Tariff (FIT) scheme still requires State Aid approval, which is being negotiated by DESNZ.  There is no certainty on the start date for the FIT exemption.   

Find out more about EII exemptions here 

EDF Energy already has a process to manage the CfD exemption and this RO exemption will align with that.  Although suppliers are not obligated to pass any saving on to EII customers, or on how we do so, Government is expecting that the market will provide for such customers, and will therefore be monitoring the process closely.  The cost of the exemption will effectively be covered by all non-EII customers. 

Next Steps

We will continue to update you development of processes for all three exemptions (RO, CfD and FiT). In the mean time you can:

1. Review your contract to see whether it’s worth fixing components of your energy bill.
2. Keep a close eye on your NEC costs so you don’t face any surprises. You can view our handy guide to NEC costs and read our latest forecast on NEC costs in Monitor by logging in signing up to Market Insight.