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Topic Title: Energy Intensive Industries
Topic Summary: re: CfD levy exemptions for energy intensive industries
Created On: 17 October 2013 01:12 PM
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 17 October 2013 01:12 PM
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jarathoon

Posts: 1042
Joined: 05 September 2004

Letter sent to the ONS today in regards CfD levy exemptions for energy intensive industries...

In the governments proposed energy market reforms the government will be exempting "Energy Intensive Industries" from paying the new levies on electricity bills. These levies are quite large and are the same order of magnitude as existing market energy prices. The costs to the rest of consumers and businesses ultimately depend on the proportion of the electricity demand from exempted industries compared with that needed by rest of society.

The government is consulting on what an "Energy Intensive Industry" is so I wanted to know if there is any raw data you hold on electricity consumption and who consumes it, that could be used for an independent assessment of the likely scale of the levy exemption policy costs both for daytime use of electricity use and night time electricity use (given a range of assumptions as to how the term "Energy Intensive Industry" will be ultimately defined).

The government have produced there own estimates of costs on an individual consumer basis.

https://www.gov.uk/government/consultations/
electricity-market-reform-contracts-for-difference-costs-exemption-eligibility

The government has contracted Vivid Economics Limited to assess the wider economic impacts of the exemption. I just wondered whether there was any raw data available within the ONS that would allow a rough cross check to be done on any estimates eventually produced by Vivid Economics Limited.

There are also important factors going forward that past data may not shine a light on:

a) How will energy intensive industries grow or decline relative to the rest of society given the new energy levy exemptions?
b) How will the incentives for energy efficiency be distributed between energy intensive industries and the rest of society, and how will this change the balance of energy demand between energy intensive industries and the rest of society?

Answers to both these questions are important because they determine the economic return on investment of energy efficiency measures. If energy efficiency measures are just end up being installed by users outside of the Energy intensive industry definition, then some of the energy efficiency savings, will simply be offset by the costs of levy exemptions being divided between a smaller number of non-exempt TWh.

Determining the gearing ratio between energy efficiency savings obtained by non-exempt users and energy cost increases as levy exemption costs are redistributed over a smaller number of non-exempt TWh could be extremely important for calculating the economic return on investment of energy efficiency measures (depending on the balance of demand between energy intensive industries and the rest of society).

Best Regards,

James Arathoon MIET


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James Arathoon
 21 October 2013 07:04 PM
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jarathoon

Posts: 1042
Joined: 05 September 2004

The reply for those of you interested:

"Thank you for your query. ONS statistics on energy consumption, energy intensity, and energy use by different industries up to 2011 can be found in reference tables at the following link:

http://www.ons.gov.uk/ons/publ...dition=tcm%3A77-269637

Energy statistics are also produced by the Department of Energy and Climate Change (DECC) in their Digest of United Kingdom Energy Statistics (DUKES) publication. This can be accessed at the following link:

https://www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes

"


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James Arathoon
Statistics

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