What's the impact of our policies on energy intensive users' energy bills?
cost to Energy intensive users
- Businesses that are large energy intensive users – where energy costs represent a significant proportion of their total operating costs – face varying impacts depending on, among other things:
- - their mixture of gas and electricity use
- - their ability to use their buying power to negotiate lower prices
- - the extent to which they consume on-site generated electricity exempt from a number of policy costs, such as the RO
- Policies are estimated to be adding between 3 and 12% to energy bills for these users in 2011 and between 2 and 20% in 2020
Infographic:
See at glance - by clicking on the image - estimated impacts of energy and climate change policies to enegry bills for Households, Medium-sized Businesses and Energy Intensive Users in 2010, 2020, and 2030.
Measures that will reduce the impact of policies on energy bills
- The Chancellor has already announced several measures in the Budget to reduce electricity costs:
- - An extension of the climate change levy discount on electricity for participants in the Climate Change Agreements scheme to 2023 and an increase in the electricity discount from 65 per cent to 80 per cent from April 2013
- - Alternative funding options will be considered for providing financial support for the Government’s Carbon Capture and Storage commitments as they would also not be funded through their own levy on the supply of electricity.
- - A cap on the cost of policies funded through energy bills.
- - Deciding to make £40million saving in 2014/15 on spending for the small-scale Feed-in Tariff (FIT) scheme
- - Re-banding the Renewables Obligation to get more capacity for less impact on consumer bills
- In addition the Government also announced at the 2010 Spending Review that it would fund the Renewable Heat Incentive through general taxation, rather than a levy on the supply of fossil fuels.
Forthcoming package of measures
- The Government has committed that, before the end of the year, it will announce a package of measures for those energy intensive industries for which the impact of Government policies on the cost of electricity will put their international competitiveness most at risk.