Chancellor George Osborne has announced that energy-intensive industries (EIIs] are to be permanently exempted from the costs of government energy schemes.
The Renewables Obligation (RO) and small-scale feed-in tariff (FiT) schemes support renewables deployment, but their costs––which are covered by businesses and households as part of their energy bills––has been growing in recent years.
The chancellor’s announcement came on 25 November as part of the government’s Autumn Statement, and is designed to “ensure that [EIIs] have long-term certainty and remain competitive”.
The statement confirmed that further reforms to these schemes, which will curb renewables deployment, will also save the average small business user £500 on their energy bills in 2020-21.
Osborne also announced that the government’s Renewable Heat Incentive (RHI) programme would be reformed in a way that delivered savings of £690mn/ year by 2020-21. The RHI is a scheme open to both non-domestic and domestic energy users that provides a payment for installations of renewable heat systems.
The government will also provide £295mn over five years to improve the energy efficiency of schools, hospitals and other public sector buildings.