This revision takes into account a new exemption from RO costs for Energy Intensive Industries (EII) – businesses which use large volumes of energy relative to their revenue.
While EII’s will be paying less for their energy, the rest of the UK will have to pay more. The impact is an increase in the RO charge of approximately 4%, adding around £0.70/MWh to energy bills.
The Government aims to have the exemption scheme in place from April 2018. It had earlier indicated wanting to bring the exemption in from the start of 2018, but has now not left enough time to enact the necessary changes. Indeed, the legislation needed is still pending Parliamentary approval, so the increase in energy bills could still come later in 2018.
The new 2018/19 RO target is 0.468 ROCs/MWh, up from the previous figure for the year of 0.452ROCs/MWh. This figure reflects the obligation on all suppliers to source a proportion of their electricity supply from registered renewable energy sources. This increase is a result of a drop in the consumer demand which is exposed to the RO, as the EII eligible consumption will be exempt.
EIIs are already allowed to have a rebate on some of their energy costs, but the changes will shift the burden of payment for the aid from Government to energy suppliers and their customers. The Government are also rolling out a similar exemption from the costs for the Contracts for Difference (CFD) scheme, as well as the Feed-in Tariff (FiT), although this still requires European State Aid approval.
Keep on top of your costs with Utilitywise
These changes all that highlight consumers have to keep a close eye on their bills to ensure that any such variations are properly passed through. We can make sure you’re bills are accurate and that any additional costs are correctly reflected in your invoices with our Bill Validation services.