Businesses operating within Energy Intensive Industries (ElIs) should be taking a long, hard look at the compensation offered by a government scheme to improve their competitiveness.
Businesswise Solutions, a business energy management specialist, has identified eligible sectors that could be entitled to substantial compensation on electricity. A key sector includes manufacturing of glass, which operate under restricting environmental taxes.
Peter Catlow, Businesswise Solutions’ director of cost management, explained: “The rebates are a partial unwinding of the government’s Renewables Obligation and Feed-in-Tariff schemes, for EIIs,put in place to meet targets to reduce the country’s greenhouse gas emissions by at least 80 percent by 2050.”
Initially, however, this has resulted in an increased electricity price for businesses within the glass industry.
Recognising the commercial damage this has caused high energy using businesses the Government has committed to providing compensation of these RO and FIT levies; which represent some 15/20% of a business’ electricity bill.
Catlow said: “Energy Intensive Industries have long argued that the environment taxes they pay impose a financial burden, which is not suffered by their international counterparts.
“This poses a threat to the UK’s competitiveness in manufacturing so the new government schemes will come as welcoming news to the glass industry.
“The rates which businesses pay for their energy are made up of various items of which significant elements are RO and FIT – green levies.
“On average, these might represent 1.5p to 2p Kwh of a business’ say 10p Kwh spend – so in effect 15/20% of their spend is green tax; a large amount when you consider such high intensity usage over a year.”
“We’re currently speaking with a customer who uses 20Gb of energy per year, and if we estimate that they could be eligible for a rebate of 2p per kwh, then they are looking at a refund of £400K. And that is not a one-off payment; the rates set from the outset will apply for the foreseeable future as to date no cap has been announced.”
The actual rebates per kwh, may vary from the above as the government is calculating rebates based on average RO and FIT rates over the past three years.
To work out eligibility, companies have to be classified under an appropriate NACE (European Trade Classification) code. These codes have been identified by the UK government and the EU as being EIIs. and then they must demonstrate that they meet the criteria for energy usage intensity.
The compensation will largely eliminate the impact the renewables policy is having on the costs of electricity for the most energy intensive industries, which includes manufacturing of hollow glass, glass fibres, flat glass and technical glassware.
Businesses which fall into these sectors of the glass industry, can apply for the compensation via a two stage application process. The Department of Business, Innovation and Skills (BIS), who are promoting and funding the schemes, have put together a comprehensive set of guidance notes, (24 pages in length) which set out the processes to be followed to check, and hopefully confirm their eligibility for financial assistance.
Peter continued: “Businesses who are eligible for compensation are encouraged to apply straight away in order to take maximum advantage of the rebate; the first step is to provide financial information which provides a rough and ready assessment of eligibility and this data should be readily available from the company accounts department.”
Those looking to make a claim will benefit the most from doing it as soon as possible, as claims cannot be back-dated, every month that passes is a lost income opportunity.
For further information about how to make a claim please contact Peter Catlow on 01282 611329, or
email him at email@example.com or visit https://energyiicompensation.org.uk/