How the Network Charging Compensation Scheme Cuts Business Energy Costs 

The scheme is part of the British Industry Supercharger, is run day to day by Elexon, and is paid for through the EII support levy, a charge on electricity suppliers that is passed on to other customers. So even if your business can't claim, the scheme still touches your bill, and it's worth knowing how it works. 

This guide explains who qualifies, how NCC claims work, the claim deadlines for 2026 and 2027, what the EII support levy could add to a typical business electricity bill, and how carbon pricing and carbon leakage sit behind the whole policy. 

What is the Network Charging Compensation Scheme?

Every business that uses electricity pays towards the cost of building, running and balancing the grid. These network charges are usually built into your unit rate and standing charge, or shown as separate lines if you're on a pass-through contract. For most businesses they're a modest part of the bill. For a steelworks, glass furnace or paper mill running around the clock, they're a major operating cost. 

The NCC scheme gives eligible energy intensive industries money back on those charges. It doesn't change the charges themselves. The business keeps paying its supplier as normal, then claims compensation from Elexon each quarter. The scheme was created by the Energy-Intensive Industry Electricity Support Payments and Levy Regulations 2024, using powers in the Energy Act 2023, and the 90% rate was introduced by an amending set of regulations in 2026. 

Why the rate rose from 60% to 90%

Where the carbon border adjustment mechanism fits

From 1 January 2027, the UK is introducing a carbon border adjustment mechanism (CBAM). It's a new tax that applies a carbon price to certain imports from the aluminium, cement, fertiliser, hydrogen, and iron and steel sectors, so they face a carbon price comparable to goods made in the UK. Businesses importing £50,000 or more of these goods over a 12-month period are directly affected. 

CBAM tackles carbon leakage from the other direction. The NCC scheme lowers costs for UK producers, while CBAM raises costs for high-carbon imports. Indirect emissions, meaning the emissions from the electricity used to make a product, won't be included in CBAM until 2029 at the earliest, reflecting the continued compensation support for energy intensive industries. 

How the NCC scheme cuts business electricity costs

The scheme works as a rebate. An eligible business pays its electricity bills in full, works out the eligible network charges for each meter covered by its EII certificate, and claims 90% of that amount back. Government figures put the value of the uplifted scheme at up to £420 million a year for the UK's most energy intensive firms, which together employ around 400,000 people. 

Partial exemptions 

Not every meter qualifies in full. If a site makes both eligible and non-eligible products, its EII certificate sets an exemption percentage for each meter, and compensation only applies to that share. Using Elexon's example, a meter with a 70% exemption and £10,000 of network charges has £7,000 of eligible charges, so the claim is worth £6,300 at the 90% rate. 

What it means for your cost per kWh 

Because network charges are part of what a manufacturer pays for every unit of electricity, compensating 90% of them lowers its effective cost per kWh across the year. The exact saving depends on location, voltage and how a site draws power, because network charges vary by region and time of use. Our guide to peak demand charges explains why two sites with the same consumption can face very different network costs. 

Who is eligible for the NCC scheme? 

Only businesses with a valid energy intensive industry (EII) certificate can claim. The certificate is issued by the Department for Business and Trade, now the Department for Business, Innovation, Science and Trade, and it's the same certificate used for the Supercharger's renewables and Capacity Market exemptions. If you qualify for those exemptions, you automatically qualify for the NCC scheme. 

The EII certificate tests 

• Sector test: the business must manufacture a product in the UK in an eligible sector, defined by 4-digit NACE code. Eligible sectors are electricity intensive and exposed to international trade, such as steel, chemicals, cement, glass and paper. 

• Business test: electricity costs must be at least 20% of the business's gross value added (GVA) over the relevant period, calculated using a baseline electricity price set by the government. 

• Data: the business needs at least one quarter of financial data, plus evidence of the electricity used to make the eligible product for at least three months. 

• Meters: the certificate covers named meters in Great Britain. Domestic meters, export meters and non-half-hourly meters aren't eligible, so qualifying sites will normally need a half-hourly meter. 

Certificates for existing holders run from 1 July to 30 June and must be renewed every year. You need to hold a certificate for the whole of any month you claim, and you can't claim for network charges incurred before your certificate was issued. The government has also committed to refreshing the eligibility data behind the Supercharger in 2026, which could change which sectors qualify. 

Who isn't eligible? 

Most UK businesses, including offices, shops, hospitality venues and the majority of SMEs, won't pass the 20% electricity intensity test. For them, the scheme matters for a different reason: they help to fund it through the EII support levy, which we cover below. 

How NCC claims work, step by step 

1. Get your EII certificate and send a copy to your electricity supplier so the Supercharger exemptions can be applied to your bills.
   
   
2. Register your company on Elexon's NCC portal, adding bank details and the people who will manage claims. Only a Claim Manager can submit a claim, and the Claim Manager can't also act as the Director for the same company.
   
   
3. Calculate your Monthly Net Totals: the net total of all eligible network charges for every MPAN covered by your certificate, adjusted for any partial exemption.
   
   
4. Gather your evidence: an electricity bill or supplier invoice showing the network charges. If your invoices don't itemise them, a director must sign a confirmation letter, which the portal sends for digital signature. Upload every relevant EII certificate too.
   
   
5. Submit during the quarterly window. Elexon emails to confirm receipt, reviews the claim, then confirms whether it's approved, partially approved or rejected.
   
   
6. Correct or dispute if needed. You can correct a claim before the correction deadline for each claim month, but a correction cancels the original, so every month in that window must be resubmitted with fresh evidence. After the deadline, you can raise a dispute within 28 days of the decision. 

If your supplier doesn't itemise network charges, Regulation 26 of the 2024 regulations lets you ask for a breakdown in writing. Suppliers must provide it as soon as reasonably practicable, or explain why they can't. If an invoice hasn't arrived before the window closes, Elexon recommends submitting with the information you have and correcting the claim later. 

Common reasons NCC claims are rejected 

• The EII certificate isn't uploaded, or isn't valid for the claim month. For example, a certificate that expires on 30 June 2026 can't support a Q3 2026 claim. 

• The invoices show a different MPAN, or a different exemption, from the one on the certificate. 

• The director confirmation letter isn't signed. 

• The claim is submitted outside the application window. Retrospective claims aren't possible. 

When NCC payments arrive 

Compensation is paid in arrears. The government's consultation response says the scheme pays around 12 months after costs are incurred, so the first payments at the 90% rate are expected after April 2027. Elexon publishes a payment schedule for each claim month, and approved amounts are paid against monthly credit notes. 

The EII support levy: who pays for the NCC scheme?

The NCC scheme isn't paid for by taxpayers. It's funded by the EII support levy (ESL), a levy on all licensed electricity suppliers in Great Britain. Elexon, acting as the EII Levy Administrator, invoices suppliers every month, and each supplier's share is set by its market share. Suppliers then pass the cost on to their domestic and business customers. 

The levy covers the compensation paid to EIIs for each claim month, plus Elexon's running costs and a reserve fund. For April 2026 to March 2027, Elexon has set annual operating costs at £70,421.04 and the reserve fund at £7,546,227.67. The government doesn't tell suppliers how to recover the levy, so some build it into unit rates while others show it as a separate line on pass-through contracts.

What to check if you're renewing in 2026 or 2027 

• Ask whether your quote is fully fixed or pass-through. On a pass-through contract, changes to non-commodity costs such as the EII support levy can flow straight onto your bill. 
• If your contract runs past April 2027, check how the supplier will handle the higher levy. 
• Compare the full contract cost, not just the unit rate. Our business energy bill guide shows where levies and network costs sit.
• If you use 100,000 kWh a year or more, ask our energy procurement team how non-commodity costs are priced into each offer. 

What businesses should do now 

If you hold, or might qualify for, an EII certificate 

• Submit your Q3 2026 claim before the window closes on 30 November 2026. 

• Check your certificate covers every month you're claiming, and renew it before it expires on 30 June. 

• Ask your supplier for an itemised breakdown of network charges for each MPAN. 

• Review past claims against the correction deadlines, starting with January 2026 claims on 23 November 2026. 

• Check whether you could also qualify for BICS or the UK ETS indirect cost compensation scheme. 

Our guide to energy procurement for manufacturing covers how to buy power for high-volume sites alongside these schemes. 

If you're not an energy intensive business 

• Find out whether your contract is fixed or pass-through, and how the EII support levy shows on your bill. 

• Allow for possible levy changes from April 2027 when you budget for your next renewal. 

• Compare business electricity prices before you renew, so you're judging the whole contract cost. 

Love Energy Savings compares business electricity from a panel of trusted UK suppliers. Whether you run a small business or a high-usage site, you can compare live prices online or speak to an expert about tendered pricing.