Huge boost for UK industry as Government powers ahead with cuts to electricity costs
Source: gov.uk (2025-07-17)

The Government has announced a huge boost to UK industry as it powers ahead with its plan to cut electricity costs.

- Plans to slash electricity network costs for energy-intensive businesses by 90% are set in motion as Government launches new consultation.
- Around 500 of UK’s most energy-intensive firms set to save up to £420m a year when current 60% discount on network charging costs increases to 90% from 2026.
- Shows UK getting on with delivering announcements in Modern Industrial Strategy that will level the playing field for British businesses, backed by Plan for Change
Around 500 of the UK’s most energy-intensive businesses such as British Steel and INEOS are set for a huge boost as the Government powers ahead with a 90% discount for businesses’ network charging costs.

Delivering on its promise in the UK’s modern Industrial Strategy launched last month to slash energy costs for heavy industry, the Government today (18 July) launches a four-week consultation on its plans to increase the discount on businesses’ electricity network charges from 60% to 90%.

The landmark new support is expected to save around 500 of Britain’s most energy-intensive firms in key sectors like steel, ceramics, glass and chemicals up to £420m per year from 2026 when in force and bring the UK’s industrial energy prices in line with European competitors, helping secure jobs and attract new investment as part of the Plan for Change.

Business Secretary Jonathan Reynolds said:

This government is on the side of British industry. When we make promises we deliver on them. That’s why we’re wasting no time in powering ahead with our plans to tackle energy costs for great British businesses and level the playing field.

The cornerstone of our modern Industrial Strategy, this landmark new support will meet a longstanding need from industry which other governments shirked – paving the way for new investment and job creation at the heart of our Plan for Change.

The launch of the consultation on the Network Charging Compensation (NCC) scheme, part of the Government’s British Industry Supercharger package of measures to tackle industrial electricity costs, will seek industry’s views on the 30% uplift and double the window which businesses have to apply for support through the scheme from one month to two.

Network charges are the costs paid by electricity network users for access to the service and are already discounted by 60% for some of the UK’s biggest industrial businesses through the NCC scheme since April 2024, saving businesses millions of pounds every month.

The proposals in the consultation launched today would see their costs fall by around a further £7 per megawatt hour (/MWh) bringing electricity prices more into line with European countries such as France and Germany.

The news follows Deloitte’s latest survey of finance officers which has found the UK is the joint top location for investment in the world, and new data from Make UK and BDO which finds that manufacturing in the UK has recovered to 2019, pre-pandemic, levels in every region, with 12,000 new jobs created in the year to March 2024.

The uplift follows other new landmark support for British industry announced in last month’s modern Industrial Strategy, with the new British Industrial Competitiveness Scheme expected to slash energy costs by up to 25 percent for over 7,000 businesses.

This scheme, which government will consult on shortly and is due to come into force in 2027, will cut costs for thousands of electricity-intensive businesses in key manufacturing sectors like aerospace, automotive and chemicals, supporting hundreds of thousands of skilled jobs by exempting firms from paying levies like the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

A new Connections Accelerator Service will also come into force by the end of 2025, streamlining access to the UK electricity grid for major investment projects to speed up delivery and bring new high-quality jobs and economic growth.

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 Minister Michael Shanks said:

We are protecting energy-intensive businesses from volatile global fossil fuel markets, slashing their electricity costs and driving growth through our Plan for Change.

These changes support our mission to bring bills down for good with homegrown clean power that we control, ensuring that industry reaps the rewards of lower energy costs.

Gareth Stace, Director General of UK Steel, and Chair of Energy Intensive Users Group, said:

Increasing network charge compensation under the Government’s Supercharger scheme is a very welcome and much-needed step towards achieving competitive electricity prices for the UK’s steel sector and other foundation industries.

These reforms reflect solutions that UK Steel has long advocated to address the persistent challenge of uncompetitive industrial electricity costs. While more still needs to be done, this is meaningful progress.

Truly competitive energy prices are essential to unlocking investment, creating jobs, accelerating decarbonisation, and securing the long-term future of steelmaking in the UK.

Investment Minister Baroness Gustafsson visited Special Melted Products – an historic British advanced manufacturing firm which currently benefits from the 60% network charging discount – in Sheffield yesterday to welcome the news, as well as a major investment in the company from Taiwanese firm Walsin Lihwa, set to create over 200 skilled jobs by 2028.

Notes to editors:
- The Government’s modern Industrial Strategy can be found here (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.gov.uk%2Fgovernment%2Fcollections%2Fthe-uks-modern-industrial-strategy-2025&data=05%7C02%7CMegan.Bevan%40businessandtrade.gov.uk%7Ca5df1d9c1941455070c608ddc52fabb7%7C8fa217ec33aa46fbad96dfe68006bb86%7C0%7C0%7C638883530726203386%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=Yo5qvIBJKsU4a3ml4JzkcGg3EOP7SqZ7B1sUH79jNkM%3D&reserved=0).
- The consultation will be published on Gov.UK later today here (https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.gov.uk%2Fsearch%2Fpolicy-papers-and-consultations%3Forganisations%255b%255d%3Ddepartment-for-business-and-trade%26parent%3Ddepartment-for-business-and-trade&data=05%7C02%7CMegan.Bevan%40businessandtrade.gov.uk%7Ca5df1d9c1941455070c608ddc52fabb7%7C8fa217ec33aa46fbad96dfe68006bb86%7C0%7C0%7C638883530726234825%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=1qZTxQJPyaqYTB09Cv11ummh6S1T%2BZ6bTAhut2E5gO0%3D&reserved=0).
- The total estimated value of the network charging compensation component of the Supercharger (at 90%) is £310-420m this year (in 2025 prices).
- The NCC uplift will provide an estimated additional £7-10/MWh discount to eligible businesses.