Following the recent unveiling of the Government’s modern Industrial Strategy, which sets out a 10-year plan to ‘boost investment, create good skilled jobs and make Britain the best place to do business’, two of the ‘biggest barriers’ facing UK industry are to be tackled — high electricity prices and long waits for grid connections. From 2027, the new British Industrial Competitiveness Scheme will reduce electricity costs by up to £40MW/hr for over 7,000 electricity-intensive businesses in manufacturing sectors like automotive, aerospace and chemicals.
These firms, which support over 300,000 skilled jobs, will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market — helping level the playing field and make them more internationally competitive. Eligibility and further details on the exemptions ‘will be determined following consultation’, which will be launched shortly.
The Government is also increasing support for the most energy-intensive firms — like steel, chemicals, and glass — by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger. These businesses currently get a 60% discount on those charges, but from 2026 that will increase to 90%, helping around 500 eligible businesses in sectors such as steel, ceramics and glass reduce their costs and protect jobs.
Significant economic benefitsThe Government said: “To ensure businesses can grow and hire without delay, we will also deliver a new Connections Accelerator Service to streamline grid access for major investment projects — including prioritising those that create high-quality jobs and deliver significant economic benefits. We will work closely with the energy sector, local authorities, Welsh and Scottish governments, trade unions, and industry to design this service, which we expect to begin operating at the end of 2025.
“New powers in the Planning and Infrastructure Bill, currently before Parliament, could also allow the Government to reserve grid capacity for strategically important projects, cutting waiting times and unlocking growth in key sectors.”
Energy Secretary Ed Miliband added: “For too long, high electricity costs have held back British businesses, as a result of our reliance on gas sold on volatile international markets. As part of our modern Industrial Strategy, we are unlocking the potential of British industry by slashing industrial electricity prices in key sectors. We are also doubling down on our clean-power strengths, with increased investment in growth industries from offshore wind to nuclear. This will deliver on our clean-power mission and Plan for Change to bring down bills for households and businesses for good.
“The Supercharger and British Industrial Competitiveness Scheme will be funded through reforms to the energy system. The Government is reducing costs within the system to free up funding without raising household bills or taxes and intends to also use additional funds from the strengthening of UK carbon pricing, including as a result of linking with the EU carbon market. We have set out an intention to link emissions trading systems, as part of our new agreement with the EU to support British businesses. Without an agreement to do this, British industry would have to pay the EU’s carbon tax.”