The EIUG welcomes the Government’s consultation proposing to increase the compensation rate of the network charging compensation (NCC) scheme from 60% to 90%.
Network charges remain relatively high compared to France and Germany, even with 60% compensation. The uplift will reduce the industrial electricity price differential between the UK and key European trading partners further. It means that the price differential is no longer due to policy cost and network charges, with the remaining differential caused by countries’ electricity generation mix and wholesale market design. However, not all electricity-intensive industries in eligible sectors are eligible for the NCC, and the EIUG continues to call for the removal of the business-level test.
UK Steel’s report on industrial electricity prices estimates that uplift in compensation would reduce network charges to £2.14/MWh, slightly higher than in France, but in line with Germany.
Arjan Geveke, Director of the EIUG, said:
“Eligible electricity-intensive industries will welcome the increase in network charging compensation. It will reduce the industrial electricity price differential with other countries further, taking it a step closer to competitive GB electricity prices.
Competitive electricity prices are critical to electrification, create jobs and deliver economic growth”.