The Network Charging Compensation (NCC) Scheme is a great way for Energy Intensive Industries (EIIs) in the UK to maintain their competitiveness in the global market, despite the rising cost of energy.
The NCC Scheme is one of the key supports available to businesses whose energy costs are over 20% of their Gross Value Added (GVA). It offers significant discounts of up to 60% on certain network charging elements for businesses that already hold an EII certificate.
In the UK, grid charges can form a substantial part of a high energy consumer’s overall costs. The NCC Scheme is designed to limit the impacts of this by reducing the charges associated with using the national grid.
Eligibility
To qualify for the NCC scheme, your business must:
- Be in an energy‑intensive industry (EII) with a valid EII certificate.
- Operate within an eligible sector defined by the 4‑digit NACE codes (same as the EII scheme).
- Use the GB (Great Britain) grid network (excludes Northern Ireland).
The scheme applies exclusively to the charges for using the GB network and only applies to usage within the eligible activity stated on the EII certificate.
The Scheme is strictly a subsidy for the activities listed on your EII certificate and they must be able to be segmented from general activity in your reporting.
The following charges are ineligible for the scheme:
- Electricity usage outside of the GB grid, including private networks and self-generated energy via renewables or installations.
- Settlement Use of System (SuoS) charges.
How the NCC Works
If accepted, the Network Charging Compensation (NCC) scheme allows businesses to claim up to 60% compensation on the following charges:
- Transmission Network Use of System (TNUoS)
- Distribution Use of System (DUoS)
- Balancing Services Use of System (BSUoS)
The first month of your EII certificate is ineligible for NCC claims due to a lack of complete monthly data.
The scheme is administered by Elexon. Both applications and ongoing reporting must be submitted to them. Elexon have built a dedicated NCC portal which allows scheme beneficiaries to manage their submissions.
Network Charging Compensation Scheme Reporting Requirements
Once awarded the NCC compensation, businesses have an accompanying set of reporting obligations. You must report the following every quarter:
- A copy of your valid EII certificate.
- Bills or invoices from your electricity supplier (showing network charges).
- A signed statement by a director or qualifying representative verifying the claim is accurate to your knowledge.
Third parties and TPIs may make submissions on your behalf, but submissions must be segmented by individual EII certificates.
To reduce the burden of these obligations, applicants and compensation recipients should maintain robust and meticulous energy consumption and cost records to allow quick access.
Register for the NCC scheme with Elexon here.
Application checklist
You should have easy access to the following to complete your application:
- Your valid, in-date Energy Intensive Industries (EII) Certificate.
- Detailed data from all of your bills, collated if possible or interrogable by having the bills to hand.
- The ability to isolate your TNUoS, DUoS and BSUoS charges on your bills. Your supplier can help with this.
- A signed statement from a director of your business verifying your claim.
Final Thoughts on the Network Charging Compensation Scheme
By combining an EII certificate with an NCC claim, UK manufacturers can reduce the cost of using the national grid, making their operations more competitive and resilient.
With rising energy prices and increasing focus on decarbonisation, schemes like the NCC are vital for manufacturers striving to balance sustainability and profitability.
It is advisable to work with an expert to complete your claim. This can save time, expedite queries and reduce the likelihood of a rejection due to inaccuracies. Speak to Procure Smart to find out more about NCC and how it could affect your energy costs.
