Removal of CCL Exemptions

What the removal of Climate Change Levy (CCL) means for customers.

In the Budget statement on 8 July 2015, the Chancellor announced the Government’s intention to remove the Climate Change Levy (CCL) exemption for renewable electricity. This change means that Levy Exemption Certificates (LECs) relating to renewable source electricity generated from 1 August 2015 onwards will no longer be eligible for the purposes of the CCL exemption.

There will be a “transition period” to redeem any LECs relating to generation before 1 August 2015; the length of this transition period is yet to be determined by the government which presents uncertainty for the industry.

Ofgem have clarified that LECs (and UK Renewable Energy Guarantees of Origin “REGOs” or EU Guarantees of Origin “GoOs”) will continue to be issued for UK and Continental renewable generators post 1 August, but will not be eligible for CCL exemption.

The change in legislation will affect some customers, and for many suppliers they will be looking to ease-in potential changes wherever possible. In particular, customers that will be effected to some degree are customers on Levy Exempt Energy contracts, Customers on Renewable Energy, Customers with discounts to CCL fixed in unit rates and Renewable Energy – new customers and renewals.

Energy providers will be in direct communication with customers prior to any changes to announce the details of their response to this Government’s announcement. For further information on the removal of the CCL exemption for renewable electricity, in the first instance contact your energy provider, or alternatively get in touch with us and we will be happy to assist.