In light of this week’s dramatic news of the UK Steel industry crisis, which has arisen in part due to high green taxation within their electricity price; it is worth mentioning that there is a scheme available for manufacturers to recover some elements of their costs.

The Government has introduced a scheme to compensate eligible customers for the impact that the Renewables Obligation (RO) and Feed-in Tariff (FiT) schemes has had on electricity prices.

Eligible businesses must apply for the scheme directly with the Government. Successful applications received from 1 April 2016 will be valid from the start of the month that they are received in.

To satisfy the criteria businesses must:

  • manufacture a product in the UK within an eligible sector.
  • pass the business electricity intensity test.

The compensation rate

The Government will calculate the amount of compensation businesses will receive; up to 85% of the RO and FiT cost to a business. This compensation would be paid quarterly in arrears by Department for Business, Innovation and Skills (BIS).

You can find more information about the scheme, and access the application form, on the gov.uk website.

Notably, what has not been highlighted by BIS is that the ongoing supplier-focussed administration costs for the scheme and shortfall in tax revenue will have to be recovered elsewhere; resulting in higher energy costs to those customers ineligible for the scheme.