Capacity market (cm)
The Capacity Market (CM) was introduced as part of the Electricity Market Reform (EMR). Its aim is to ensure security of electricity supply as the UK becomes increasingly reliant on renewable technology. The CM charge within your energy bill is based on your usage between 4pm-7pm, Monday to Friday during November, December, January and February.
Capacity market obligation levy
The Capacity Market was introduced by the government to guard against blackouts and ensure reliable and affordable electricity as more renewable plants come online.
The Capacity Market Obligation Levy recovers from suppliers the payments made to scheme generators. Your charge will be based on your consumption on weekdays between 4pm-7pm, November to February.
Capacity market operational levy
The Capacity Market Operational Levy covers the administration cost to manage the Capacity Market scheme. It is charged on a pence per peak kWh basis.
Your carbon footprint is the total amount of greenhouse gases, such as carbon dioxide, released into the atmosphere because of your actions. Listed UK businesses have a requirement to report on their Greenhouse Gas (GHG) emissions.
A carbon offset scheme allows you to invest in projects that help to cut emissions or absorb CO2 to balance your own carbon footprint. You may want to offset all your carbon footprint or just one aspect such as business travel. There are a number of standards to help verify carbon offsets, these include the Voluntary Gold Standard (VGS) and the Voluntary Carbon Standard (VCS).
Climate change levy (ccl)
What is climate change levy and how is it charged?
Climate Change Levy, sometimes shortened to CCL, is a UK-specific energy tax.
How ccl is calculated
CCL will only apply to your business if your energy consumption averages more than 33 kWh of electricity or 144 kWh of gas per day. Where your energy consumption falls below this amount the consumption is considered to be “de minimus” and will therefore not attract any CCL charge.
If your premises is considered to be of “domestic use” then the associated usage is also excluded from CCL as well as standard VAT – see below.
When a business has a single site with multiple MPANs, the total consumption is calculated by combining the consumption for all MPANs on the site. This total is compared against the de minimus number to determine whether a CCL tax should be applied.
How to reduce your ccl
A reduction in your businesses CCL can be applied if you have the relevant CCL certificate issued by HMRC. The discounts are currently: electricity – 90%, gas – 65%.
The commodity cost or commodity charge relates to the wholesale cost of electricity or gas within your energy bill.
Contracts for difference (cfd)
The Contracts for Difference (CfD) scheme is the U.K. government’s main mechanism for supporting low-carbon electricity generation.
CfDs incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, and they protect consumers from paying increased support costs when electricity prices are high.
The CfD scheme requires all suppliers to pay a levy to fund this ongoing development. This cost is then passed onto all electricity customers through their invoices.
Contracts for difference (cfd) obligation levy
The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting low-carbon electricity generation. It aims to provide stability and predictability to future revenue streams for generators. The Contracts for Difference (CfD) Obligation Levy recovers from suppliers the payments made to scheme generators.
Contracts for difference (cfd) operational levy
The Contracts for Difference (CfD) operational levy covers the administration costs to operate the scheme and is charged on a pence per kWh basis.