The Network Charging Compensation (NCC) Scheme
The Network Charging Compensation Scheme (NCC)
For many UK businesses, rising electricity costs remain one of the biggest pressures on profitability and competitiveness. While wholesale prices often dominate headlines, network charges have been rising sharply and make up a larger percentage of energy spend than ever before. This is particularly true for energy-intensive industries.
The Network Charging Compensation Scheme (NCC) was introduced with a goal of providing eligible businesses with compensation against specific electricity network costs. However, despite the potential savings available, many organisations are either unaware of the scheme or unsure whether they qualify.
For businesses with high electricity usage, the NCC could provide substantial financial relief and improve long-term competitiveness.
Why Was the NCC Introduced?
The UK government introduced the Network Charging Compensation Scheme as part of a broader effort to support energy-intensive industries (EIIs) facing increasing international competition and high domestic energy costs.
Many UK manufacturers compete globally against businesses operating in countries with lower energy costs and lower network-related charges. Without support mechanisms, these costs can make British industry less competitive.
The NCC was designed to compensate eligible businesses for a proportion of specific electricity network charges -- helping reduce the disparity between UK energy costs and those faced by overseas competitors. The scheme complements other forms of support available to qualifying industries, including the IETF, the ESL, and the ETII Exemption Scheme.
What Are the Benefits of the NCC?
The primary benefit of the scheme is straightforward: lower electricity costs.
Eligible businesses can receive compensation against Contracts for Difference, Renewables Obligation (RO), Feed-in Tariffs (FIT), and costs related to the Capacity Market. For a business consuming 4,000,000kWH of electricity per year, this can lead to annual savings of £225,000.
The NCC can allow businesses to:
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