If you run a manufacturing business in the UK, you already know your electricity costs more than your competitors’ on the continent. What is less well understood is why, and what if anything the state is going to do about it for a business your size.

Here is the honest position as it stands in August 2026, including the parts that are not helpful.

The gap is structural, not a blip

In 2024, the UK had the highest industrial electricity prices of any country in the International Energy Agency. Not among the highest. The highest.

And within the UK, size buys you a discount that smaller manufacturers never see. In 2025, extra-large energy users paid around 12p per kilowatt hour. Small users paid over 25p. That is roughly double, for the same electrons.

For comparison, the ratio between what domestic customers pay and what very large industrial users pay averaged 2.8 in France and 2.5 in Germany between 2008 and 2023. In the UK it was 1.6  British industry gets a far smaller discount than its European competitors do.

One thing we are not going to tell you

You will read a lot of marketing that says energy prices are rising. As of the most recent official figures, that is not true.

DESNZ put the average UK electricity price for the manufacturing sector at 17.47p per kilowatt hour excluding the Climate Change Levy in the first quarter of 2026  down 5.2% on the same quarter a year earlier. Across all non-domestic users, the average was 24.14p including the levy, down 6.2%.

So, wholesale-driven prices are falling. The problem is the level, not the direction and the non-commodity part of the bill is heading the other way, which we come to below.

The three schemes, and who they are for

Scheme	What it gives	Who qualifies	When
British Industry Supercharger (EII exemption)	Exemption from renewables levies and network charging compensation, worth roughly £65–£87/MWh	Two tests, both must be passed: manufacture within 76 listed activities, and electricity costs at 20% or more of gross value added	Live now. Covers around 500 businesses
British Industrial Competitiveness Scheme (BICS)	Up to 25% off eligible electricity bills, around £35–£40/MWh, via exemption from Renewables Obligation, Feed-in Tariff and Capacity Market costs	Registered at Companies House, in an Industrial Strategy manufacturing sector by SIC code, electricity intensity above 0.9% (frontier) or 2.7% (foundational), minimum 33 MWh a year per site. Great Britain only	Applications 1 Oct – 30 Nov 2026. Decisions Jan 2027. Relief starts Apr 2027
Climate Change Agreements	A 92% discount on the electricity rate of the Climate Change Levy in return for efficiency targets	Listed energy-intensive sectors only — chemicals, steel, paper, food and drink processing, intensive agriculture and others	Phase 3 began Jan 2026, running to 2033. New applications open to August 2026

Why most manufacturers get nothing from the first one

The Supercharger’s business-level test is the killer. Your electricity costs must be 20% or more of your gross value added.

For a steelmaker or a smelter, that is achievable. For a machine shop, a plastics processor, a packaging manufacturer, a bakery, a coatings business or a subcontract fabricator, electricity costs are usually in low single-digit percentages of gross value added. You could double your bill and still not qualify.

That is why the Supercharger reaches around 500 businesses in a sector with tens of thousands of them.

BICS is the one worth ten minutes of your time

The British Industrial Competitiveness Scheme was created precisely because so many manufacturers fall outside the Supercharger. Government expects over 7,000 manufacturers to benefit.

The intensity thresholds are far lower 0.9% for frontier sectors and 2.7% for foundational ones, against the Supercharger’s 20%. The minimum consumption is 33 MWh a year per site, which most manufacturing sites clear comfortably.

Two things to be clear about. First, the timing: applications run from 1 October to 30 November 2026, decisions come in January 2027, and the Renewables Obligation and Feed-in Tariff exemptions do not begin until April 2027, with Capacity Market exemptions following in October 2027. Nothing arrives this year. Second, it is Great Britain only Northern Ireland is excluded, and you cannot claim BICS and Supercharger relief for the same activity.

Worth doing this quarter, regardless of who you buy energy from: check whether your SIC code sits in an Industrial Strategy manufacturing sector, work out your electricity intensity, and get the application in before 30 November. Up to 25% off your bill from April 2027 is worth an afternoon of somebody’s time.

Meanwhile, the part of the bill nobody is cutting

While the wholesale element falls, network charges are going the other way. Following Ofgem’s RIIO-ET3 determinations, allowed transmission revenue rises from £4.3bn in 2025-26 to £7bn in 2026-27  a 63% increase in the underlying cost.

Ofgem projects that businesses face a 5 to 10% increase in total electricity costs as a result. One published worked example put the additional annual cost for a medium-sized factory at £9,760.

The Climate Change Levy on electricity, meanwhile, sits at 0.801p per kilowatt hour from April 2026 and rises to 0.827p from April 2027.

Which leaves one lever

You cannot control the unit rate. You can control the units.

Every kilowatt hour you do not use is one you do not pay the wholesale price for, do not pay network charges on, do not pay the levy on, and do not have to report the carbon for. It is the only part of the bill that is entirely within your gift, and it is the only one that does not depend on a scheme, a threshold or an application window.

For most manufacturers the fastest place to find it is not the machines those are already watched. It is everything plugged into a socket, a fused spur or an extension lead: offices, quality lab, canteen, welfare, gatehouse, despatch, and a good deal of the floor itself. Around 40% of a typical commercial building’s energy goes through the sockets and roughly half of that is wasted, and almost nobody measures it.

Smart sockets measure it fifty times a second, learn what is plugged in, and switch off the waste automatically without cutting anything somebody is using. A dual-gang socket is £26, and the software is £21 per device a year. Typical payback across a deployment is under ten months which, as it happens, is sooner than BICS pays out.

What to do this quarter

1. Check BICS eligibility and get the application in before 30 November 2026.
2. Ask your supplier for twelve months of half-hourly data. Free, one email.
3. Find your overnight and weekend baseline what the site draws when nothing is being made.
4. Work out what of that baseline must be there and what is simply never switched off.
5. Then automate it, because the manual version stops working after three weeks.

Frequently asked questions

Mark this section up with FAQ Page schema.

Why is UK industrial electricity so expensive?

A combination of the way wholesale prices is set by gas, the levies and network costs loaded onto electricity bills, and a smaller industrial discount than European competitors receive. In 2024 the UK had the highest industrial electricity prices of any IEA country.

Do I qualify for the British Industry Supercharger?

Only if you manufacture within one of 76 listed activities and your electricity costs are 20% or more of your gross value added. In practice that means very energy-intensive sectors. Around 500 UK businesses qualify.

When does the British Industrial Competitiveness Scheme start paying out?

Applications run from 1 October to 30 November 2026, decisions are expected in January 2027, and the Renewables Obligation and Feed-in Tariff exemptions begin in April 2027. Capacity Market exemptions follow in October 2027.

Can I claim BICS and the Supercharger at the same time?

No. You cannot claim relief under both schemes for the same activity.

Are electricity network charges going up in 2026?

Yes. Following Ofgem’s RIIO-ET3 determinations, allowed transmission revenue rises from £4.3bn to £7bn for 2026-27, and Ofgem projects a 5 to 10% increase in businesses’ total electricity costs as a result.

 

Kee Business Services  ·  km@kbs.team  ·  Manchester, UK  ·  Keeping promises. Keeping costs under control.