The UK Government has placed electricity networks at the heart of Britain’s economic revival, with thousands of UK manufacturers set to receive major reductions to their energy bills under the newly-unveiled 10-year Industrial Strategy.
The British Industrial Competitiveness Scheme will see more than 7,000 manufacturers benefit from electricity bill cuts of up to 25% from 2027. The scheme will scrap levies such as the Renewables Obligation, Feed-in Tariff and Capacity Market charges – amounting to potential savings of £40/MWh.
For energy-intensive sectors including steel, chemicals, glass and ceramics, support will arrive even sooner. Under the British Industry Supercharger, relief on network charges will rise from 60% to 90% from 2026.
Prime Minister Keir Starmer hailed the announcement as “a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past.” Energy Secretary Ed Miliband added, “We’re unlocking the potential of British industry by slashing industrial electricity prices in key sectors.”
Grid reform and planning shake-up
Acknowledging that lower energy costs mean little without access to the grid, the Government has committed to launching a Connections Accelerator Service by the end of 2025. Backed by new powers under the forthcoming Planning and Infrastructure Bill, the service will allow Whitehall to reserve grid capacity for strategically important projects and streamline long-delayed connection applications.
Electricity networks have also been formally recognised as a ‘foundational sector’ within the Clean Energy Industries Sector Plan, which pledges an Industrial Growth Plan for the networks, fresh investment through Great British Energy and the National Wealth Fund, and support for flexibility services and digitalisation.
Industry largely welcomes UK Government’s vision
The UK’s electrical supply chain has responded positively to the Government’s announcement.
“We are especially pleased to see the level of financial support being targeted for BEAMA sectors through GB Energy, the National Wealth Fund and the British Business Bank. Our hope is this can help bring forward investment in UK manufacturing to supply the UK’s electrification needs across the grid and in homes,” said Yselkla Farmer, Chief Executive of BEAMA.
Her comments were echoed by BEAMA President Erika Wilson, Managing Director of Wilson Power Solutions, who noted, “We strongly support efforts to attract global talent to the UK, facilitating knowledge transfer and workforce development.”
John Griffiths, CEO of Lucy Electric, added, “Bold decisions and commitments are needed now to secure investment quickly and ensure the lowest possible cost to UK customers.”
Large manufacturers also lent their support. Schneider Electric, which has invested nearly £50 million in Yorkshire over the past two years to meet rising demand for grid equipment, called the strategy “an important policy milestone.”
“The technologies already exist to manage energy and reduce costs – increased uptake of these should be supported to help all businesses, not just those eligible under the new scheme,” said Kelly Becker, President of Schneider Electric UK & Ireland.
Clean energy supply chain bolstered
Great British Energy is to receive a further £700 million to support domestic manufacturing of floating wind platforms, subsea cables and hydrogen infrastructure. This will bring the total supply chain fund to £1 billion.
Martin Pibworth, incoming CEO of SSE, described the strategy as “a welcome signal of long-term thinking and ambition”, while National Gas CEO Jon Butterworth said the plan would “position Britain as a world leader in technologies like hydrogen and carbon capture.”
Despite the positive reception, some within the energy sector are urging further action.
Phil Thompson, CEO of Balance Power, warned that, “Exemptions alone don’t tackle the root of the energy cost problem – continued reliance on an overworked and over-constrained grid system,” and called for greater support for on-site renewable generation.
Fusion, upskilling powers forward
Nuclear fusion also forms part of the strategy, with £2.5 billion pledged over five years to support the STEP prototype plant at West Burton. Paul Methven, CEO of the UK Industrial Fusion Solutions (UKIFS), said STEP would “create high-quality jobs, drive innovation, and deliver economic growth both regionally and nationally.”
The Industrial Strategy also promises a £1.2 billion annual boost for skills by 2028-29, a rise in public R&D funding to £22.6 billion by 2029-30 – including £2 billion for AI – and an expansion of the British Business Bank’s capacity to £25.6 billion, to help attract private investment into British innovation.
What’s next?
The Government will now enter a two-year consultation period to determine eligibility for the new levy exemptions. Meanwhile, industry awaits further detail in the promised Grid Industrial Growth Plan, the Low Carbon Flexibility Roadmap, and the forthcoming Warm Homes Plan – all critical in ensuring that UK electrical manufacturing is equipped to meet the clean power demands of the 2030s.
