In addition to managing energy procurement and infrastructure, our energy experts are well versed in dealing with a whole host of different energy legislation. The government’s agenda to drive reductions in energy usage (and associated carbon emissions) through increased taxation and legislation means that there are a number of different levies and charges that apply to the cost of energy in addition to the basic wholesale price. In some instances, E.g. the Energy Intensive Industries (EII) legislation, certain businesses may qualify for an exemption to offset this increase in non-commodities costs.
However, for most businesses, the clear message is ‘reduce consumption or suffer increased costs’. For larger enterprises, there are also a number of different hoops that you need to jump through, to prove that you are taking steps to reduce consumption and make efficiencies within your business.
We've put together a number of information sheets to help to guide you through these regulations:
Streamlined energy and carbon reporting (SECR)
SECR is one of the many energy-focused initiatives which has transpired as a result of the Paris
Climate Agreement and the UK’s commitment to reducing carbon emissions by 80% by 2050. As of 1st April 2019 businesses are required to disclose energy consumption and greenhouse gas emissions (GHG) as part of their Annual Directors Report.
Energy savings opportunity scheme (ESOS)
The second phase of the Energy Savings Opportunity Scheme is now live with an assessment deadline of 5th December 2019. For those businesses that meet the requirements, it’s time to begin the compliance process, start work on your energy audits and identify savings opportunities.
Energy intensive industries (EII)
The EII Exemption is a piece of Government legislation that recognises the financial impact associated with the cost of Renewable Obligation (RO) and small scale Feed-in Tariff (ssFiT) on energy intensive industries.
The government recognises that these indirect costs could make UK energy-intensive businesses less competitive in the market place. They have therefore introduced this legislation to offset the increase in
non-commodity related electricity costs and to support their ability to compete on an international basis.
If you haven't heard of non-commodity costs then you may have heard of “non-energy costs”, “third party charges”, or “pass through charges”. In broad terms, the price on your energy bill can be broken down by wholesale costs and non-commodity charges. Whilst the wholesale side is relatively straightforward, the way that the non-commodity costs are charged is far more complicated and are due to a number of different government levies, tariffs and third party charges.
DCP 161 is a new measure which has been introduced by Ofgem and will be effective from 1st April 2018. This legislation follows the work that has been carried out as a result of P272 as it impacts those businesses
that meet the requirements for having HH (Half Hourly) meters.
In contrast to P272, the focus of DCP 161 is on capacity and from 1st April 2018, those half hourly (HH) supplies that exceed their assigned available capacity will be charged significantly more, in some cases as much as up to three times higher than the standard rate. The applicable rates will vary by region and it’s expected that if your business is in an area where demand for capacity is high your energy costs will reflect this.
DCP 228 and is one of the latest regulations to impact DUoS (Distribution Use of System) charges and will come into effect from the 1st April 2018. It is a major regulation change which will impact the cost of your business’ electricity bills and may affect when you use electricity.
If you are not sure whether or not the above regulations apply to your business, please get in touch.
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