The Energy Intensive Industries (Eii) scheme was launched in 2016 as a first protection against the costs of greening the grid for manufacturers with very high electrical usage. There have been a number of similarly named schemes which operate slightly differently to each other, here we refer to the Energy Intensive Industries Exemption scheme, but we can also assist with alternative variants.
The Eii Exemption scheme provides relief of up to 100% on the following non-commodity costs:
Initially, the discount was set at 85% of these charges but as of 2024 eligible businesses are now exempt from 100% of these charges.
The Network Charging Compensation Scheme (NCC) also known as the Supercharger was added to the Eii scheme to provide additional relief from the charges of maintaining the network for eligible Eii businesses. It provides relief of up to 90% of the costs of the following non-commodities and related losses:
The NCC is not an exemption scheme, it is a compensation scheme. This means that businesses will still pay the charges initially on their electricity invoicing, and then are rebated this money a year later. The scheme is administration-heavy with actions required monthly to ensure that the appropriate rebates are received, and director signoffs on claims but together the two can reduce your electricity costs by 55%.
The initial test for eligibility for Eii Exemption is at Sector Level.
To ensure that support is targeted at those most at risk, the UK Government limited eligibility to those sectors which are electricity intensive and subject to international competitive pressures, with a trade intensity of at least 4%. A list of eligible activity NACE codes is available which must be matched to your business activity, where necessary we can look at eligibility at a product level.
You must also pass a Business Level Test for eligibility. Your businesses Electricity Cost Impact must be higher than or equal to 20% to be eligible for Eii and NCC.
To calculate this we use a Baseline Electricity Price which is set by the government and deflated to equivalent 2012 prices. This is multiplied by your consumption to provide a reference cost of electricity. This is then divided by your business’ baseline Gross Value Added (GVA) – also deflated to 2012 figures.
If you are eligible for Eii Exemption you will automatically be eligible for NCC once your certificate arrives.
If it is possible that your business qualifies for both BIC and Eii & NCC, this is the preferred scheme to apply for as whilst it has a higher administrative burden, it also provides higher benefits. See our article comparing Eii NCC and BIC for more details.
