Green Gas Support Scheme & Green Gas Levy for Energy Suppliers | Dyball Associates
Energy suppliers have to pay out for many green levies and schemes with many of these costs being passed onto consumer energy bills. This Autumn another new levy will come into force in the form of the Ofgem regulated Green Gas Support Scheme and Green Gas Levy.
What is the Green Gas Support Scheme?
The government's goal of achieving Net-zero carbon emissions by 2050 has resulted in numerous green policies being introduced in recent years with many having cost implications for UK energy suppliers.
One of these new schemes is the Green Gas Support Scheme (GGSS) which is designed to provide a financial incentive for an increase in the number of anaerobic digestion biomethane plants. In short, the government wants to increase the proportion of green gas being used in the nation’s gas grid.
Heating has been marked by environmentalists as one of the biggest sources of carbon emissions. To that end they want regular gas boilers banned and ideally replaced with provenly less effective and highly costly heat pump systems.
Green gas is seen as one way to reduce carbon emissions and the government is seeking applicants to the GGSS across England, Scotland and Wales.
The scheme will be open to applicants in England, Scotland and Wales for four years from autumn 2021. Those that register and participate in the scheme will then receive quarterly payments over a 15 year period based on the amount of eligible biomethane that a participant supplies to the gas grid.
Also read: Government plans new tax on Gas suppliers to support its green energy drive
What is the Green Gas Levy?
The Green Gas Levy was first announced back in March 2020 as part of chancellor Rishi Sunak’s 2020 budget and was immediately condemned by some energy suppliers.
The Green Gas Levy will place more obligations onto gas suppliers and will see them be required to make quarterly levy payments to fund the GGSS.
In March 2021, the Department for Business, Energy & Industrial Strategy (BEIS) named Ofgem as the intended administrator of the GGSS and the GGL.
Also read: Energy Suppliers announce opposition to Green Gas Levy plans
The backlash against the Levy
The announcements of the levy were met with anger by several energy suppliers and Citizens Advice when it was first proposed in 2020. Suppliers argued that the levy will be deeply unfair on the consumer and will force energy bills higher.
They argue that the levy is just another unfair tax that will see every gas customer in the UK regardless of their wealth charged up to £6.90 a year, irrespective of how much gas they use. This would mean that large businesses that use a lot of gas will end up paying the same amount as a single person living in a small property.
The Green Gas Levy will launch in the third quarter of 2021, with the first levy collection set for April 2022.
Also read: Energy Suppliers call for changes to electricity and gas levies
Dyball Associates will keep you informed of the latest changes and our team of energy market consultants can guide you through the steps to enter the UK energy market. Whether you’re looking for electricity and gas systems or support on starting an energy supply company, Dyball Associates can help.
Further Reading
Total Number of Installed Smart Meters surpasses 16 million
EDF becomes first Energy Supplier to hike Energy Bills in line with the next Price Cap Level
Symbio ordered to pay £450,000 into Government Renewable Schemes
Dyball Associates are proud to help new supply businesses successfully launch in the UK market.
Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.
For more information on how to start and manage an energy company, get in touch with Dyball Associates today.
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