The UK Government is committed to reducing carbon emissions in a way which is consistent with meeting legally binding targets – by reducing greenhouse gas emissions by 80%, by 2050.
A key part of this approach to decarbonising the energy sector is to create policies and mechanisms to incentivise the building and generation of electricity from renewable sources. The key mechanisms put in place by the UK Government are the Renewables Obligation (RO), the small-scale Feed-in-Tariff (FiT) and the recently introduced CfD FiT for larger generation, which offer financial security and incentives to renewable generators.
Whilst the RO will soon be closed to new entrants (2017), it will still continue to support eligible generation through to their expiry; being replaced by the CfD FiT mechanism. The small-scale FiT will continue to offer support to generators. Both of these schemes (alongside other schemes and mechanisms not covered under this support package) are passed through by suppliers into consumers bills and in 2016 averaged 23% of an average consumer’s electricity bill. This is forecast by Beond to remain static (as a percentage) through to 2020 but will continue to increase in cost – relative to other charges which will increase by greater amounts.
A consultation was held between 31st July and 24th October 2014 to assess the impact of rising non-commodity charges and levies on the energy consuming sector and a response to this consultation was published on the 19th January 2015. As of January 2016 this consultation has been approved and eligible industry sectors can now apply for a refund in the indirect costs to their business on these two major mechanisms.
Beond can support your organisation in understanding the four main steps to assessing whether your business is eligible to claim compensation for the indirect costs of RO/FiTs:
All organisations must have a UK registered company at Companies House – although a process exists for those companies not currently UK incorporated.
Beond are a privately owned specialist energy market consultancy – offering innovative and bespoke services to a wide range of energy and carbon consumers. Our business is built on offering tailored energy management and purchasing solutions, supported by our proprietary software and managed by our dedicated team of experts.
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