Why has the Government introduced the UK’s Modern Industrial Strategy?
For some time, British manufacturers have complained that high electricity prices make it hard for them to compete with rivals in Europe, the US, China, and India.
According to the latest data from the International Energy Agency (IEA), the UK has the highest industrial electricity prices among all IEA member nations. When comparing costs with other major manufacturing economies such as China and India, which are not IEA members, the disparity is even more pronounced.
In 2023, the UK reported the highest electricity prices for industrial users out of the 24 countries reporting to the IEA. Electricity prices for UK industrial users were almost 50% higher than in France and Germany and four times higher than in the USA and Canada. In 2023, UK electricity prices were 46% higher than the IEA median. Over the last 10 years, UK electricity prices for industrial users have ranged from 17% to 49% above the IEA median.
Recent data from the UK Office for National Statistics reveals that output from UK energy-intensive industries (including paper, metals & castings, and petrochemicals) has plummeted to its lowest level since 1990.
This data reinforces the long-standing concern that UK industries are being left behind. The manufacturer organisation Make UK has lobbied the Government for further support as UK industry has been faced with the harsh reality of either cutting production, shutting down operations, or relocating to countries with lower energy costs, leading to significant UK job losses.
What is the UK’s Modern Industrial Strategy?
Published on Monday 23 June 2025 the UK Government has introduced The UK’s Modern Industrial Strategy, “a ten-year plan to boost investment, create good skilled jobs and make Britain the best place to do business by tackling two of the biggest barriers facing UK industry – high electricity prices and long waits for grid connections”.
The report states that with the unpredictability of UK energy prices compared to other international markets due to the prevalence of natural gas in the energy generation mix (26.3% during 2024 according to the National Energy System Operator), and with respondents to the Invest 2035: the UK’s Modern Industrial Strategy consultation stating that high and unpredictable energy prices alongside grid connection delays acted as barriers to investment.
Under the strategy, the government will increase support for eligible businesses in the most energy-intensive sectors (e.g., steel, chemicals, glass) through the current British Industry Supercharger scheme (British Industry Supercharger - Network Charging Compensation Scheme & EII Support Levy), along with the introduction of the new British Industrial Competitive Scheme from 2027.
What is the British Industrial Competitiveness Scheme?
The British Industrial Competitiveness Scheme will see up to 7,000 electricity-intensive UK businesses in manufacturing sectors, including automotive, aerospace, and chemicals, see up to 25% of their electricity costs reduced from 2027. From 2027 (following a 2-year consultation), the scheme will look to support electricity-intensive users reduce energy costs by up to £40 per MWh, through a reduction in government levies such as Renewable Obligation (RO), Feed-in Tariff (FiTs), and Capacity Market (CM).
What is the British Industry Supercharger – Network Charging Compensation Scheme and EII Support Levy?
Introduced in April 2024, the British Industry Supercharger was implemented to support Energy Intensive Industries (EII), which are particularly exposed to high electricity costs (steel, metals, chemicals, cement, glass, paper) with the intention to bring electricity costs more in line with international competitors to help boost the UK’s competitiveness.
EII Renewable Levy Exemption: This increased the subsidy under the existing EII renewable levy exemption from 85% to 100% on three key renewable energy policies (Contracts for Difference (CfD) levy, Renewables Obligation (RO) levy, and Feed-in Tariff (FiT) levy). The participants of the scheme also receive 100% relief from the recently (April 2025) introduced EII Support Levy charges.
Capacity Market Charges Exemption: Granting EIIs with a full (100%) indirect exemption from the costs associated with the Capacity Market (CM).
EII Network Charging Cost Compensation: This scheme compensates EIIs for 60% of their network charges, which are the charges used to pay for the electricity transmission and distribution networks.
With the latest announcement, the Government is providing further support for these eligible EII businesses by increasing the current 60% discount to provide relief of 90% from 2026. The Government claims that this support will help around 500 eligible businesses further reduce their electricity costs.
What is the new Connections Accelerator Service?
The new Connections Accelerator Service will help to streamline grid access for major investment projects, including the prioritisation of projects that create high-quality jobs and significant economic benefits.
With an expectation that the service will commence operating by the end of 2025, it will ensure that the energy sector, local authorities, Scottish & Welsh Governments, trade unions, and industry will work closely together to improve access. Should the Planning and Infrastructure Bill pass through parliament, then the Government will be able to reserve capacity on the grid for strategically important projects to cut lead times and encourage growth.
How can NUS Consulting Group help your business?
The UK’s Modern Industrial Strategy, incorporating the new British Industrial Competitive Scheme for 7,000 UK businesses, will provide a significant opportunity for those that qualify to see up to a 25% reduction in their electricity costs. With the further enhancement in delivering greater relief to qualifying Energy Intensive Industries (EII) businesses, your organisation must take advantage of these significant government support programmes.
NUS Consulting Group has a team of experienced Analysts who are ready to guide your organisation through the process of assessment and application for these government programs. Your NUS Consultant will be in touch with you should your company be identified as one of those that could qualify.
For energy-intensive businesses, NUS Consulting Group can support your organisation to implement actionable insights, whether that is in reducing energy costs through analysis and optimisation, proactively advising on strategic energy purchasing, assessing and advising on opportunities to implement energy efficiency or onsite renewable generation, while guiding on the journey to meet sustainability targets. Please register your interest for a free consultation or email: contact@nusconsulting.com.
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