Exempt Supply: Why everyone’s talking about it
How does exempt supply work, who can benefit and why is the energy market buzzing about it? Let’s break it down.
If you’re a business buying energy or a generator selling it, you may have heard of Exempt Supply—also known as Supplier Exemption. But while the concept has been around for 20 years, it’s only now that it’s starting to generate real buzz.
Exempt Supply isn’t new, but until now, it’s been difficult to implement. But that’s all about to change.
In April 2024, a key update, P442, will tweak the rules around Exempt Supply, making applications easier and more accessible for utilities generators and businesses.
Previously, every half-hour of energy had to be perfectly matched between buyers and sellers, making the process complex and limiting who could take part. With P442, that requirement is gone, and you can now use the grid to balance supply, making it far simpler to roll out.
At tem., we’re ahead of the curve. We’ve already completed over 70 Exempt Supply applications through our RED Plus service, making it easier for both businesses and generators to unlock more value from their energy.
For businesses, that means lower costs on energy bills. For generators, it means higher earnings per MWh.
A true win-win.
So how does it work, and who can benefit? Let’s break it down.
What is RED Plus?
At tem., our core offering, Renewable Energy Direct™ (RED), connects multiple businesses with multiple generators through our advanced matching system, cutting out the middlemen and driving fairer prices for all.
But with RED Plus, we go a step further. Instead of many-to-many matching, we pair a single generator with a business in a special direct agreement, unlocking even greater savings through something called Exempt Supply.
Why does this matter?
Exempt Supply is a government-backed scheme that allows us to reduce Non-Commodity Costs (NCCs) like CM, CfD, RO and FiT. These are extra charges that cover things like network fees and supplier costs, which make up a big chunk of your energy bill, typically around £50 per MWh.
By directly linking a generator’s supply to a business’s usage, we can eliminate some of these fees. That means businesses can significantly cut costs on their energy bills, while generators can earn more per MWh, increasing their returns.
How does it work?
We review our portfolio to find a strong energy match between a generator and a business.
If their output and usage volumes align, we set up an Exempt Supply agreement between the two – on top of their existing RED contract.
This allows us to remove certain NCCs, passing the savings directly onto both parties as a RED Plus benefit in their invoices.
In some cases, a generator’s output can be matched with many businesses, so there’s even greater savings across the board.
What’s in it for generators?
Renewable generators have long been exposed to market volatility and pricing uncertainty. RED Plus helps change that.
By reducing NCCs and locking in better pricing, generators can earn more, reduce risk, and create long-term value, all while powering UK businesses with renewable energy.
What changes for You?
Nothing, except the savings!
Whether you’re a business buying energy or a generator supplying it, your contract stays the same – just with more value.
Your energy contract remains secure and tem. still handles everything as before, like billing, customer service, and insights.
The only difference? You'll see savings appear as a RED Plus benefit in your invoice every month.
What’s next?
RED Plus is already delivering real value, with some customers benefitting by as much as £50 per MWh with no extra effort
If you’re a business looking to cut costs or a generator wanting to earn more, get in touch with tem. today to see if you qualify.