When the UK Government published its Advanced Manufacturing Sector Plan earlier this year, much of the coverage focused on innovation, skills, and supply chain resilience. But one of the most immediate and impactful elements for manufacturers is energy. High energy costs have been a long-standing barrier to competitiveness in UK industry, often undermining investment and threatening the sustainability of operations. The new plan signals a clear shift: government intervention to reduce electricity costs and level the playing field internationally.

At the heart of this is the proposed British Industrial Competitiveness Scheme (BICS), set to launch in 2027. This scheme aims to address the persistent gap between UK electricity prices and those faced by competitors in Europe and beyond. Energy-intensive manufacturers in particular metals, chemicals, ceramics, glass, and food processing, stand to benefit from direct cost relief.

How will the scheme cut your costs?

The BICS is designed to reduce industrial electricity bills by £35 - £40 per megawatt hour until 2030. It will do this by removing or compensating for policy levies and network charges that currently inflate UK industrial prices.

One of such changes is to the Network Charging Compensation (NCC) scheme, raising the level of relief on electricity network charges from 60% currently, to 90%. This NCC change provides a significant relief that could represent millions of pounds in savings each year for large sites with round-the-clock operations, or a meaningful reduction in cost per unit for medium-sized manufacturers.

Beyond headline savings, the scheme also creates a more stable environment for long-term planning. If UK industrial energy prices converge with those in competitor nations, investment cases for upgrading machinery, scaling production, or electrifying processes become much more attractive. Lower baseline costs also make it easier to justify additional decarbonisation investments.

There are also plans for the government to support the development of Corporate Power Purchase Agreements in the UK, another potential route for energy consumers to secure more stable electricity prices for the long term.

What should manufacturers do now?

Although the scheme is still some time away, there are steps to take today:

• Assess your energy usage - Understand how and where your energy is being used, and where possible start optimising usage performance.
• Review your levy burden - Look at your energy outputs and explore how much of your current electricity bill is tied to levies and network charges that could be offset by BICS.
• Claim now - If you are in an Energy Intensive Industry (as listed here) make sure you are registered for NCC and are making your quarterly submissions.  
• Consider improvements - With incoming potential savings, explore improvements which could further save money and streamline your energy usage.
• Revisit your investment pipeline - Projects previously dismissed as marginal may become viable once electricity costs fall.
• Stay informed - Policy details are still evolving. Keeping up to date will ensure you are ready to benefit as soon as the scheme is live.

The Advanced Manufacturing Sector Plan is more than a vision document it’s a practical signal that Government recognises energy as a competitive barrier. For many manufacturers, it could be the start of a more affordable and sustainable energy future.

However, it’s important to not stay complacent and explore how to make your energy work as efficiently as possible to reduce unnecessary costs and stay competitive in the market.

If you have a question, big or small about your energy challenges, our experts can help, no jargon, no pressure, just reliable expertise.