Department for Business and Trade, Network Charging Compensation Scheme

The Department for Business and Trade, Network Charging Compensation Scheme aims to reduce industrial electricity prices for eligible Energy Intensive Industries in Great Britain through different exemptions and compensation. It forms part of the British Industry Supercharger package of measures.

It is estimated that the current annual value of the Scheme is £190 million and £260 million but is expected to increase to between around £310 and £420 million per year.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• Detail should be provided on how the Scheme will address any identified negative externalities, such as from carbon emissions.
• Assesments should explain how the Scheme (e.g. through compensation rates) will ensure it is the minimum necessary to achieve the policy objective.
• Information should be provided on any competitive and investment analysis which has been made, including any impacts to these areas to date.
• Any balancing exercises should consider a wide range of negative impact, such as on competition, investment and geographical effects.
• Explanation should be included on how the scheme will comply with the Energy and Environmental Principles where applicable.

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