UK Government unveils major plan to reduce industrial energy costs

The UK government today unveiled an ambitious new industrial strategy promising significant cuts to electricity bills for over 7,000 businesses. The comprehensive ten-year plan aims to foster investment and create skilled jobs by directly addressing two major hurdles for British industry: exorbitant electricity prices and lengthy grid connection waits.

The centrepiece of the energy component is the new British Industrial Competitiveness Scheme, set to take effect from 2027. This initiative will exempt a broad spectrum of electricity-intensive manufacturers, spanning sectors such as automotive, aerospace and chemicals from green levies including the Renewables Obligation and Capacity Market charges. These exemptions are projected to reduce electricity costs by up to GBP 40 per megawatt hour, translating to overall bill reductions of up to 25%.

This marks a significant expansion from the existing Energy Intensive Industries (EII) initiative, which primarily targets around 500 of the most energy-intensive firms. While the EII scheme previously offered 100% exemption from green levies, the new strategy significantly broadens the scope of beneficiaries, extending support to a far wider array of businesses.

Furthermore, the government is intensifying support for the most energy-intensive firms under an enhanced British Industry Supercharger. From 2026, their discount on electricity network charges will jump from 60% to a substantial 90%, providing deeper relief for these crucial industries. A new Connections Accelerator Service is also being introduced to streamline grid access tackling a persistent barrier to industrial growth.

Industry experts, McGrady Clarke, a leading consultancy in energy and carbon reduction, have consistently highlighted the critical need for such interventions. "High energy costs have long hampered the competitiveness of UK businesses on the international stage," commented McGrady Clarke Director, Theo Clarke. "This strategy's dual approach of broadening support and deepening relief for the most impacted sectors is a welcome development. It provides the long-term certainty businesses need to invest and decarbonise effectively."

“We are also mindful that companies outside of the scope of the government’s plans also need help with their energy costs and have developed energy trading mechanisms and consumption mitigation options which go some way to matching the new Industrial Strategy measures”.

Companies seeking further information on the Industrial Strategy’s impact on their business should contact: info@mcrgadyclarke.com or visit https://www.mcgradyclarke.com/

ENDS

Editor’s Notes

McGrady Clarke is a leading business sustainability and energy consultancy specialising in energy consumption and carbon reduction, Net Zero strategy, and climate-related compliance reporting. Since its 2019 foundation in Newcastle upon the consultancy has grown to be recognised as a trusted partner for large UK and EU businesses and public sector organisations seeking to reduce their energy costs and carbon footprints.

Contact

For further information please contact Millie Plant, Marketing Content Executive

Tel: 0191 8142000
Email: millie.plant@mcgradyclarke.com

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