Support for energy intensive industries

Support for energy intensive industriesEnergy intensive businesses will get help to offset the cost of energy policy on their electricity bills under plans published by Business and Energy Minister Michael Fallon.

Proposals to exempt the most electricity intensive industries from a proportion of the costs of Contracts for Difference will be subject to consultation. The move will “level the playing field” so that British businesses are not made uncompetitive due to the costs of this policy.

Contracts for Difference have been introduced to support investment in low carbon electricity generation. They are a significant element of Electricity Market Reform (EMR) and aim to stimulate investment by providing a stable long-term price for low carbon electricity.

Business and Energy Minister Michael Fallon said: “As we reform the market to attract new investment into our energy infrastructure, it is vital that we do not undermine the competitiveness of UK industry.

“Energy intensive manufacturing is central to strengthening our industrial base and rebalancing our economy. These industries are significant employers and play an important role in the low carbon economy through the products they manufacture.”

The exemption from the costs of Contracts for Difference is part of a government package to support the most electricity intensive industries. This consultation sets out what the exemption might look like, and seeks views on eligibility criteria.

The recommended option is to use the same eligibility criteria as the EU Emissions Trading System and Carbon Price Support indirect costs compensation. This would exempt industries with a total combined value to the UK of approximately £50 billion in turnover, employing 150,000 people.