The rate of CCL on electricity is expected to increase from 0.583p/kWh in 2018/19 to 0.847p/kWh in 2019/20, while the rate of CCL on natural gas is expected to jump from 0.203p/kWh in 2018/19 to 0.339p/kWh in 2019/20.
This step change represents a rate increase of 45% for electricity and 67% for natural gas. LPG and other taxable fuels will also increase in line with natural gas.
With these adjustments, the relative difference between CCL rates charged on electricity and gas will change from the current 2.9:1 ratio to a ratio of 2.5:1.
In effect, this makes electricity relatively cheaper and gas relatively more expensive. It is intended to incentivise a reduction in gas consumption and reflects changes in the fuel mix used in electricity generation.
The government plans to rebalance the ratio to 1:1 by 2025.
Bigger CCL discounts for CCAs from April 2019
Organisations who benefit from Climate Change Agreements (CCA) will get an increased CCL discount, to compensate for the CCL rate increases. From April 2019, the discount for electricity will increase from 90% to 93% while the discount for gas will increase from 65% to 78%. Existing CCA eligibility criteria will be kept in place until at least 2023, to ensure that energy-intensive industries remain protected.
How The Utility Buyers can help
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