What is the CCL exemption for renewables?
On 1 April 2001, the Government introduced the Climate Change Levy (CCL) under the Finance Act 2000. It is a charge on non-domestic supply of electricity in the United Kingdom. This is the industrial and commercial supply of taxable commodities for lighting, heating and power by consumers in industry, commerce, agriculture, public administration and other services.
Electricity is currently (with effect from 1 April 2012) subject to the Levy at a rate of £5.09/MWh (subject to certain exclusions, exemptions, reduced-rate and half-rate supplies).
The Climate Change Levy (General) Regulations 2001 provide for an exemption from CCL for renewable electricity.
The Climate Change Levy (General) (Amendments) Regulations 2003 extended the exemption to electricity produced from good quality CHP.
The Climate Change Levy (General) (Amendment) (No. 2) Regulations 2003 extended the exemption to electricity produced from coal mine methane which was removed on 1 November by the Finance Act 2008.
What are Renewables LECs?
Renewables Levy Exemption Certificates (Renewables LECs) are electronic certificates. We issue them, monthly, to accredited generating stations, for each Megawatt/hour (MWh) of renewable source electricity generated. In the case of NFFO/SRO generating stations we issue LECs directly to the electricity suppliers entitled to receive them. LECs identify renewable source electricity produced by accredited renewable generating stations.
Before it can receive LECs, a generating station must apply to Ofgem for accredited status.
Renewables LECs are part of the evidence required by HM Revenue & Customs to demonstrate the amount of renewable source electricity supplied to non-domestic customers in the United Kingdom. They are used by electricity suppliers to claim the CCL Exemption on non-domestic supply. Suppliers allocate Renewables LECs to a supply pursuant to a renewable source contract.
The legislation
The relevant pieces of legislation are:
- Finance Act 2000
- The Climate Change Levy (General) Regulations 2001 (Statutory Instrument (SI) 2001 No. 838)
- The Climate Change Levy (General) (Amendments) Regulations 2003 (SI 2003 No. 604)
- The Climate Change Levy (General) (Amendment) (No. 2) Regulations 2003 (SI 2003 No. 2633)
- The Climate Change Levy (General) (Amendment) Regulations 2007 (SI 2007 No.2903)
- Finance Act 2008
This legislation is published on the Office of Public Sector Information website: www.legislation.gov.uk - link opens in a new browser window.
What is Ofgem’s role?
We are responsible for monitoring the exemption claimed in Great Britain. Ofreg has a similar role in respect of electricity supplied in Northern Ireland.
Our responsibilities include:
- accrediting qualifying renewable generators
- issuing Renewables LECs
- receiving notification of the certificate number of each Renewables LEC allocated to a supply
- reporting those certificate numbers to HM Revenue & Customs
Fuelled Generating Stations
Depending on the technology and fuels utilised at your generating station one of the following documents will need to be completed and submitted alongside an accreditation application.
- For generating stations making an accreditation application under the RO and the CCL, the generator should select one of the documents available on the RO: Fuelled Stations Page.
- CCL Only Waste Stations should complete the specifically designed questionnaire for determining the renewable content of their waste. There is an associated guidance document to aid the completion of this questionnaire.
- CCL only applications, utilising fuels other than waste, please complete the Standard CCL FMS Questionnaire.
All these are available for download below. If you are unsure as to which document to submit please call: 020 7901 7310, and a member of the fuelling team will be able to assist you.
Associated documents
Readers should be aware of the following documents:
Contacts
If you have any questions relating to the CCL Renewables Exemption scheme, please call our dedicated Renewables team hotline on 020 7901 7310 or email: Renewable@ofgem.gov.uk in the first instance.