A Feed-in Tariff (FIT) exemption for energy intensive industries will apply in the UK.
The Department for Business, Energy and Industrial Strategy (BEIS) has published its response to a consultation on exempting energy intensive industries from the indirect costs of FiTs.
The government recognises in the short to medium term, the increase in retail electricity prices to help pay for renewable and low carbon electricity support schemes may risk putting certain energy-intensive businesses at a significant competitive disadvantage when they are operating in international markets.
Previously they were compensated – exempting them altogether is expected to have a number of benefits, including faster, more accurate and more certain support.
The exemption will be available to the same energy intensive industries eligible for the Contract for Difference (CfD) and Renewables Obligation exemptions.
It will be based on the same application process as the CfD exemption.
BEIS will not require suppliers to pass savings through to energy intensive industries – instead, it will be applied by deducting electricity exemptions from the calculation of each supplier’s market share and the calculation of overall supply.