BICS Update – what the latest government consultation response means for you

What the latest BICS consultation response means for your business.

Envantage has taken an active role in the government’s consultation process on the British Industrial Competitiveness Scheme (BICS).

In this article, we share our views on some of the key headlines in the latest government consultation response, as well as providing guidance on immediate next steps to maximise the benefits of the BICS scheme for your business.

Eligibility based on electricity consumption

We believe there should be a lower de-minimis limit to ensure the benefit of BICS is aimed at manufacturers. However, like many others, we felt 3.5MWh was far too low. Fortunately, the government has listened to the concerns of industry and is setting the lower limit at 33MWh.

This avoids the risk of the application process being flooded by applicants for whom the scheme was not designed, clogging up the system for those who should get the benefit.

Reduced BICS application window

The government has confirmed an even shorter application window of just two months, which opens on 1st October and closes on 30th November.
This approach shortens an already tight deadline and locks eligible businesses out of the first year and backdate payment if they can’t get an application in by 30th November.

We expect the DBT will be inundated with applications to review in a tiny window, and companies will be frantically trying to get through the bottleneck. While the government has confirmed more time for future years, this isn’t helpful to companies who miss out on the initial backdated payment.

The government has also ruled out mid-year entry into the scheme. This is disappointing as eligible companies will miss out on savings at the convenience of suppliers.

Enforcing suppliers to pass on BICS savings

If you are on a fixed contract, and RO, FiT and CM are built into your unit rates, your supplier may be reluctant to unpick that for you and apply the discount. We believe some suppliers will take this as a sign that they don’t have to.

That’s why your business needs to be on the right energy tariff & billing structure to ensure you receive the full benefit of the scheme.

Changes to the eligibility period

Like many others, we felt that the scheme provided more stability if it replicated the 5-year eligibility of the EII (Energy Intensive Industries) scheme. The Government has decided to allow 5-year certification, with a 2-year review and annual declarations.

This is great news for eligible businesses, providing a longer-term guarantee of financial support via the scheme.

Next steps for your business

• Check if the latest government proposals affect your eligibility status. While there has been some clarification on the relevant SIC codes, determining how much discount you are entitled to is not always clear cut. It’s vital to get this right as it will make the difference between getting all, some, or none of the available savings.
• If your procurement contract is up for review soon, pause and check that signing a new contract won’t prevent you from securing valuable BICS savings. Check if your contract has a transparent pass-through mechanism for elements like RO, FiT and CM charges – to be sure that your business, not the supplier, receives all your savings.

Envantage can bring together its expertise in exemption schemes and energy procurement, to ensure you maximise the savings opportunities offered by BICS.

To book a free BICS review with one of our specialist consultants, get in touch today.

Categories

• Compliance
• Energy

Tags

• Compensation schemes
• compliance

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