Business energy bill reductions in the pipeline

More than 7,000 British businesses are set to see their electricity bills slashed by up to 25% from 2027, according to the UK Government’s Industrial Strategy.

The document sets out 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.

British manufacturers currently pay some of the highest electricity prices in the developed world while businesses looking to expand or modernise have faced delays when connecting to the grid.

From 2027, the new British Industrial Competitiveness Scheme will reduce electricity costs by up to £40 per megawatt hour for over 7,000 electricity-intensive businesses in manufacturing sectors like automotive, aerospace and chemicals.

These firms, which support over 300,000 skilled jobs, will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market — helping level the playing field and make them more internationally competitive. Eligibility and further details on the exemptions will be determined following consultation, which will be launched shortly.

The government is also increasing support for the most energy-intensive firms — like steel, chemicals, and glass — by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger. These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%. This means their electricity bills will go down, helping them stay competitive, protect jobs, and invest in the future.

This will help around 500 eligible businesses in sectors such as steel, ceramics and glass reduce their costs and protect jobs in industries that are the backbone of our economy and will be delivered at no additional cost to the taxpayer.

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.