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<p>The Office for Budget Responsibility published estimates of the costs of renewable
generation at time of the Budget. Please see table 2.7 of the Supporting document
entitled ‘<a href="https://emea01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fobr.uk%2Fefo%2Feconomic-fiscal-outlook-october-2018%2F&data=02%7C01%7C%7C6cf9e21adf4044e6d8d908d676390573%7Ccbac700502c143ebb497e6492d1b2dd8%7C0%7C0%7C636826384603279206&sdata=BxkOgTna6XrjbjhQZ9VqwC9%2FBOTffTW1jWPp4RB04sQ%3D&reserved=0"
target="_blank">October 2018 Economic and fiscal outlook – supplementary fiscal tables:
receipts and other</a>’.</p><p> </p><p>Eligible energy intensive businesses in the
UK receive relief from up to 85% of the indirect costs of support for renewable electricity
deployment through the Contracts for Difference, Renewables Obligation and small-scale
Feed-in Tariff schemes. State aid rules set out that any additional relief above 85%
must be limited to an amount that is determined by the business’s Gross Value Added
(GVA). A decision to provide additional relief would therefore lead to companies producing
the same product receiving different percentage levels of relief depending on their
GVA. The Coalition Government consulted on providing additional relief from the indirect
costs of renewable electricity as allowed under the state aid rules, but concluded
that to do so could distort competition in the UK market. The Government keeps this
assessment under review.</p><p> </p><p>Relief from renewable electricity costs is
part of a wider package of measures to reduce the cumulative impact of energy and
climate change policies on industrial electricity prices for key energy intensive
industries. This includes a package of compensation for these industries worth over
£850 million since 2013, of which more than £270 million has been provided to the
steel sector.</p>
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