The government has announced a consultation on the new British Industrial Competitiveness Scheme (BICS) that would offer energy price cuts for up to 7,000 manufacturing businesses from April 2027. Aimed at high-growth industries such as automotive, aerospace and chemicals, the aim is to bring prices in line with international competitors.
It builds on the separate British Industry Supercharger scheme (announced previously), which will increase the discount on electricity network charges from 60% to 90% for roughly 500 of the most energy-intensive businesses (like steel, glass, and cement) from April 2026.
Steve Atkins, Head of Customer Experience (Technical), responds to the news and shares his thoughts on the impact it will have on businesses.
“The Autumn Budget was expected to be tough on businesses, so the BICS announcement regarding energy price cuts comes as welcome, timely relief for UK manufacturers facing crippling energy costs here in the UK. No matter how hard a company works to manage its wholesale market risk, there are still many unavoidable costs.
“Manufacturing is generally operating against a backdrop where over 60% of its costs are imposed in the form of network charges, taxes and levies. No matter how hard a company works to manage its wholesale market risk, these charges will still apply. Therefore, a 25% reduction in them will be welcome news. But only for some.
“For too long, government support has only protected the largest, most energy-intensive companies to prevent them from moving operations overseas. However, this new scheme finally casts the net wider to help the smaller, niche producers who are the true backbone of UK industry and vital to the wider supply chain – benefiting UK business and competitiveness.
“The proof, however, remains to be seen. Previous schemes have been notoriously hard to enrol for, with strict rules over the measures of ‘carbon intensity’ meaning some were excluded. The government must ensure BICS is easy to access, avoids overly strict eligibility rules, and genuinely boosts our international competitiveness.
“Crucially, manufacturers cannot see this as the whole answer. While relief offers a potential financial lifeline, long-term resilience only comes from a holistic energy strategy and removing dependency on the ever-challenging grid. This would include a combination of self-generation (where possible), energy management and monitoring, a risk strategy that optimises wholesale costs and ultimately, investment.
“Additionally, neither should government relief be used as a proxy for carbon abatement. Many third-party charges can be avoided entirely by removing grid dependency. As the UK invests heavily in ‘the greening of the grid’ to help the transition to net zero, network costs and green levies remain and look set to increase further in the coming years.
“Times are tough in the current economic climate; the best thing a company can do is prioritise a full energy strategy to develop long-term resilience and certainty against the backdrop of changing political tides. working with a transparent energy partner to control costs and deliver long-term certainty.”
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