The UK government has launched its new 10-year Industrial Strategy. The plan aims to boost investment, foster growth, create well-paid jobs and establish Britain as a prime location for doing business. A central pillar of this strategy is a focus on tackling the high energy costs impacting the UK’s competitiveness on the global stage.
The Industrial Strategy directly addresses this by planning to slash electricity bills by up to 25% for 7000+ businesses from 2027.
Key measures related to energy costs
• British Industrial Competitiveness Scheme: From 2027, this new scheme will reduce electricity costs by up to £40 per megawatt-hour for over 7,000 electricity-intensive businesses in manufacturing sectors. These firms will be exempt from paying levies like the Renewables Obligation, Feed-in Tariffs, and the Capacity Market. The specific eligibility criteria for these exemptions will be determined following a two-year consultation period.
• British Industry Supercharger: For approximately 500 of the most energy-intensive firms – including those in the steel, chemicals, and glassmaking industries – their network charges will be significantly cut.
These businesses currently receive a 60% discount, which will increase to 90% from 2026. This measure aims to help these industries reduce costs, protect jobs, and invest in their future. For the steel industry specifically, this enhanced discount is expected to reduce power prices by £6.50 per megawatt hour, saving £14.5 million per year.
• Streamlining Grid Connections: The strategy also includes measures to speed up the time it takes to connect new factories and projects to the energy grid. A new Connections Accelerator Service will streamline grid access for major investment projects, particularly those creating high-quality jobs and delivering significant economic benefits.
These reforms will be funded through changes to the energy system and additional funds from the strengthening of UK carbon pricing, including potential linking with the EU carbon market.
What the industrial strategy means for your business
The strategy focuses on eight specific sectors where the UK demonstrates potential for faster growth:
• Advanced Manufacturing.
• Clean Energy.
• Creative Industries.
• Defence.
• Digital and Technologies.
• Financial Services.
• Life Sciences.
• Professional and Business Services.
For many businesses, particularly those in the manufacturing and energy-intensive sectors, these changes represent an opportunity for substantial cost savings.
However, navigating the details of the new British Industrial Competitiveness Scheme and the enhanced British Industry Supercharger, understanding eligibility, and implementing changes that align with these reforms will require careful attention.
How can Consultiv Utilities help?
• Providing expert guidance: We can help you interpret the complex details of the new schemes as they emerge from the consultation process, ensuring you understand the implications for your specific operations.
• Assessing eligibility: We’ll work with you to determine if your business qualifies for the discounts.
• Optimising energy procurement: We’ll advise on how these exemptions may affect your energy procurement strategy, helping you secure the right contract for your business.
• Strategic energy management: Beyond bills, we can assist in developing a bespoke strategy that aligns with the broader goals of the Industrial Strategy, such as transitioning to cleaner energy sources.
• Proactive involvement: We’ll engage with the consultation on behalf of our customers where possible.
• Ongoing analysis: We’ll be keeping an eye on developments over the next 12-18 months and will provide updates to our customers when they are available.
By actively engaging with the new Industrial Strategy’s provisions, especially those related to energy costs, UK businesses can position themselves for greater stability and growth.
Get in touch to find out how you can leverage the new Industrial Strategy to set your business up for future success.
Contact Page Form
Categories: