• Blog
• Energy Guides

EII support levy: How the charge works and how it affects businesses

Certain energy-intensive businesses in Britain, including steelworks and chemical manufacturers, receive a 90% discount on the network charges portion of their electricity bills. These discounts total over £20 million each month

This discount is not funded by the government, but is instead recovered through the EII support levy, which is added to the electricity bills of all other business and domestic customers.

This guide explains the EII support levy and its impact on businesses. Here’s what we cover:

• What is the EII support levy?
• EII support levy rates
• Why the EII support levy exists
• Does the EII support levy fund all EII exemptions?
• How the EII support levy works

What is the EII support levy?

The EII support levy (also known as the network charging compensation charge) is a mandatory unit cost added to all electricity bills in Great Britain. It funds payments made to certified Energy Intensive Industries (EIIs), partially refunding the network charges on their electricity bills.

The scheme was introduced in April 2024 as part of the government’s British Industry Supercharger programme, which aims to reduce the cost of electricity for energy-intensive industries and bring them closer to the lower prices their competitors face in Europe.

The levy is collected by electricity suppliers and administered by Elexon. Elexon invoices suppliers monthly and distributes the funds to eligible EIIs.

EII support levy rates

The total required payments under the EII support levy are published six months in arrears by Elexon.

The table below shows the latest EII support levy rates and their impact per kWh of electricity consumed by customers.

Sources: Exelon Estimated Levy Funds, LCCC Eligible Demand Data

On 1 April 2026, the network cost rebate increased from 60% to 90%, which will result in higher EII support levy rates for all other electricity customers.

Does the EII support levy fund all EII exemptions?

Under the British Industry Supercharger programme, certified EIIs receive exemptions for environmental levies and network costs.

However, the way these industrial users receive this relief varies depending on the type of cost.

Only the network cost element is reimbursed by charging all other consumers through the EII support levy.

The table below shows how each element of the EII exemption works:

Why the EII support levy exists

The EII support levy exists because British business electricity prices for energy-intensive industries have historically been among the highest in Europe, putting British manufacturers at a significant competitive disadvantage against overseas rivals.

The cost of electricity in Britain has put pressure on strategically important UK industries such as steel production, chemicals, glass and cement.

The government selected specific energy-intensive industries to support with lower bills. Instead of funding the discount through general taxation, these lower bills are supported by a levy which spreads the cost across all other electricity consumers.

How the EII support levy works

This section explains the step-by-step process of how the EII support levy is calculated and charged to consumers.

1. Certified EIIs submit quarterly claims under the network charging compensation scheme

Energy-intensive businesses hold an EII certificate from the Department for Business and Trade, which allows them to claim a rebate for network charging compensation.

Every quarter, EIIs submit a return to Elexon that breaks down the following network charges they have incurred from their electricity supplier:

• Transmission Network Use of System (TNUoS)
• Distribution Use of System (DUoS)
• Balancing Services Use of System (BSUoS)

2. Elexon calculates the Estimated Levy Fund

Elexon reviews, calculates and approves each claim submitted by certified EIIs.

Elexon uses the sum of all claims to publish an Estimated Levy Fund, which is an indication of monthly submitted claims and the total amount that will be collected from non-EII consumers.

Elexon publishes its monthly Estimated Levy Fund on its website.

3. Elexon invoices suppliers for the EII support levy

All licensed domestic and business energy suppliers are charged the EII support levy based on their market share percentage, according to the recorded consumption of their customers.

The invoices typically include three components:

• EII levy payments – Their calculated share of the Estimated Levy Fund.
• NCC operational costs – A charge to cover Elexon’s administrative costs related to the scheme.
• Reserve fund – A top-up of the reserve fund used to maintain payments if a supplier fails to pay a EII support levy invoice.

Suppliers are required to pay Elexon five working days after the Supplier Invoice Date.

4. Elexon pays the EIIs

After collecting funds from all active suppliers, Elexon makes compensation payments to eligible EIIs.

Payments are made monthly, but 13 months after the relevant claim period.

5. Suppliers pass the cost to non-EII customers

Suppliers recover the cost of Elexon’s invoice by charging all customers on a per-unit £/kWh basis.

For simple fixed domestic and business energy contracts, this charge is incorporated into the unit rate.

For pass-through and flexible energy contracts, the EII support levy will appear as a separate line item on their business electricity bills.

Who pays the EII support levy?

Every British mains electricity customer that is not certified as an Energy Intensive Industry pays the EII support levy. It is collected by the energy supplier and passed to Elexon, who administers the scheme.

This includes all MPAN profile classes:

• 01, 02 – Domestic electricity users
• 03, 04 – Commercial properties with low-capacity connections
• 05 – 08, 00 – Commercial properties with half-hourly electricity meters

The levy applies regardless of which supplier you are with. It is a government-mandated charge, not a supplier decision, so switching business energy supplier will not remove it from your bill.

How the EII support levy affects businesses

The EII support levy adds a small cost to every unit of electricity consumed by the vast majority of British businesses that are not EII participants.

Although difficult to avoid, there are a number of ways businesses can reduce their exposure to the EII support levy:

• Improve business energy efficiency – Energy efficiency measures reduce the number of kWh consumed by a business. Since the EII support levy is charged on a unit basis, this reduces overall exposure to the levy.
• Using an alternative to grid consumption – The EII support levy applies to electricity consumed from the grid. Investing in on-site energy generation, such as commercial solar panels or CHP systems, allows businesses to avoid this charge.

Although changing suppliers does not directly help, our business electricity comparison service has helped thousands of businesses find the most competitive tariffs in the market.

Who manages the EII support levy

There are several organisations involved in administering the EII support levy. Here’s a breakdown of their roles:

• Department for Business and Trade – The government department that owns the EII policy. It sets the rules for EII eligibility, issues EII certificates to qualifying businesses, and is responsible for any changes to the scheme through legislation.
• Elexon – The operator of the EII support levy. It is responsible for refunding EII participants for their network charges and funding these payments through the EII support levy with licensed suppliers.
• LCCC / EMR Settlement Ltd – Responsible for collecting the metered data across the retail energy market, which is used to calculate the EII support levy for each supplier.
• Licensed electricity suppliers – Legally required to collect the levy from their non-EII customers and pay their monthly invoice to Elexon for the EII support levy.

Back to blog

• Share:
• 
• 
• 
•