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New UK rules to partly exempt some heavy industries from renewables scheme cost

March 29, 2017

By Paul Homewood

 

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LONDON (Reuters) – Britain’s government presented new regulations to Parliament on Tuesday which it said will exempt certain heavy industries from some of the costs of a renewable energy support scheme, saving them around 100 million pounds ($125 million) a year.

The measures will exempt around 130 energy-intensive companies in Britain in sectors such as steel, chemicals, glass and cement, from some of the costs passed on from the government’s Contracts-for-Difference (CfD) scheme which is aimed at spurring investment in low-carbon energy generation.

Businesses with high energy consumption, such as chemicals, steel or cement producers, have long complained about rising costs from Britain’s climate change policies.

Industry body UK Steel said the exemption gives long-term certainty, which helps deliver a more competitive environment for British steel manufacturers, putting them on a more equal footing with their European Union competitors.

"We want the UK to be one of the best places in the world to build and grow a business and that means creating the right conditions for companies to thrive and succeed," UK energy minister Jesse Norman said in a statement.

CfDs are won through a competitive bidding process which guarantees companies a certain price for the low-carbon electricity they produce for a set number of years.

This should give them support and certainty to attract investment and get projects off the ground.

However, the cost of funding the scheme is recovered through a levy on energy suppliers which is then passed onto domestic and business energy bills.

Although energy costs on average account for 3 percent of UK business expenditure, there are 15 sectors where this reaches 10 percent, the government said in a statement.

Separately, the government is pursuing discussions with the European Union to seek further exemptions from policy costs for energy-intensive industries, it added.

https://uk.news.yahoo.com/uk-rules-partly-exempt-heavy-industries-renewables-scheme-134312597–finance.html

 

All of this means that the extra costs will be passed onto other bill payers instead.

Talk about rearranging the deckchairs on the Titanic!

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14 Comments
  1. Jack Broughton permalink
    March 29, 2017 5:21 pm

    Probably too late to save UK heavy industry: most went to the wall / was closed to save redundancies in the EU years ago. However, the idea is good.

    Would suggest that a popular way of recovering the lost revenue would be to pass it on to the banks…….. sorry but who owns the banks……. ah well back to the grindstone!

  2. March 29, 2017 5:43 pm

    It’s more or less what Germany does I believe. Of course, the simple solution would be to just make inexpensive energy freely available to all again

    • John Palmer permalink
      March 29, 2017 5:59 pm

      +10!

    • March 29, 2017 7:30 pm

      The UK Government doesn’t do simple solutions. It introduces schemes such as the RO and FiT schemes. When these fail, it adds on more and more schemes, which each in turn go on to fail – such as CfD, the Capacity Market, DSR, STOR. The Government are obeying the Iron Law of Regulation, which states: “There is no form of market failure, however egregious, which is not eventually made worse by the political interventions intended to fix it”.

      • HotScot permalink
        March 30, 2017 7:22 am

        Well put.

  3. markl permalink
    March 29, 2017 5:58 pm

    Never too late to save UK’s heavy industry. It’s arguably the most important aspect of a nation’s industrial supply chain and that’s why it’s targeted by the One World Government proponents using AGW as the false pretense. The sole purpose is wealth redistribution from the successful capitalistic Western industrialized nations to the struggling Socialist/Marxist economies. What they can’t achieve with their failed ideologies they are stealing. And not a shot is fired.

    • Athelstan permalink
      March 29, 2017 10:23 pm

      A precise and unerring bulls eye.

      Scum floats to the top; Internationalists/cultural Marism/critical theorists, with the corporate wrecking crews are fixed on turning first world countries into, nation states, third world sh&7 holes and is, the very kernal of their noxious strategy.
      Mr. Donald Trump gets it, we are seemingly doomed because, our PTB are sold on agenda 21 and its consequent deconstruction of this nation state and via the transport of financial catastrophe of mass immigration from anywhere and everywhere west, east and south of Suez. The political claque are dedicated to maintaining open borders and to the provision of welfare free at the point of access, all of this financial illiteracy illiberal lunacy is allied inextricably to the green lunacy and all of which is shutting down British industry and manufacturing; paring it until, there is no bone left.

      You vote for them, LiblavCON.

  4. March 29, 2017 10:29 pm

    Energy policy lurches along … I doubt I’m alone in thinking hey … why am I paying like double that – and being told it’s because I’m a Carbon sinner.

    I wonder if the neighbours will complain about the new cement kiln I’m now planning in the back garden? – a new opportunity for RHI certified products?

  5. auralay permalink
    March 30, 2017 9:58 am

    I am wondering how long it will be before the cost of a household generator in the shed, running on domestic gas supply will break even with the cost of mains electricity? Once fracking starts (and I think it is inevitable now), gas costs will drop while electricity seems to inexorably rise. I suspect the tipping point is when the UK grid goes the way of South Australia and the cost and inconvenience of frequent blackouts will out-way the capital cost of the generator.

    • auralay permalink
      March 30, 2017 10:53 am

      …out-weigh!

    • Gerry, England permalink
      March 30, 2017 12:40 pm

      Diesel perhaps? You can use non-highway red diesel and you can get dual fuel gas-diesel generators as they might put some of the cost of climate tax onto gas to avoid electricity becoming totally unaffordable.

  6. March 30, 2017 11:58 am

    The Government’s consultation on this last year noted that:

    “An exemption provided to industry will narrow the base of consumption from which total RO and FIT support costs are recovered, and therefore increase electricity costs for non-exempt households and businesses.”

  7. March 30, 2017 12:27 pm

    “Separately, the government is pursuing discussions with the European Union to seek further exemptions from policy costs for energy-intensive industries” They should just abolish the charges in total and tell the EU to FO

    • Gerry, England permalink
      March 30, 2017 12:43 pm

      If – and it is an enormous if – we do get any form of trade deal with the EU they might include things like emissions in it. That is the problem with big trade deals – the tariff bit is about one paragraph in 1300 pages of other stuff. China doesn’t get offered any free trade deals due to human rights.

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