Source · Select Committees · Business and Trade Committee
Recommendation 22
22
Accepted
Include measures in industrial strategy to level industrial energy prices for key sectors.
Recommendation
We recommend that the industrial strategy must include measures that level the playing field with our international competitors on industrial energy prices. Priority should be given to leading sectors, and other foundational industries, in which high energy prices have the greatest impact on the ability of UK-based businesses to compete and attract investment. As an initial step, we recommend the Government consider extending the British Industry Supercharger scheme. (Recommendation, Paragraph 102)
Government Response Summary
The government has accepted the recommendation, announcing an uplift of the Network Charging Compensation scheme from 60% to 90% from 2026 and a new British Industrial Competitiveness Scheme from 2027 to reduce electricity costs for energy-intensive industries.
Government Response
Accepted
HM Government
Accepted
13.1. The Industrial Strategy announced that we will increase support for our most energy-intensive industries eligible for the British Industry Supercharger package, with an uplift of the Network Charging Compensation (NCC) scheme from 60% to 90%. This will provide additional price relief from 2026 for around 500 eligible businesses, further reducing the competitiveness gap with comparable neighboring countries. The NCC uplift will reduce electricity prices for large industrial users by around a further £10/MWh, bringing the total reduction offered by the British Industry Supercharger to around £78/MWh. 13.2. From 2027, a new British Industrial Competitiveness Scheme will reduce electricity costs by c.£35- 40/MWh and support over 7000 thousand businesses. The scheme will benefit electricity-intensive frontier manufacturing industries in the IS-8, such as automotive and aerospace, and electricity-intensive foundational manufacturing industries in the supply chains, such as chemicals. Eligible businesses will be exempt from paying the costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market. The scheme will bring electricity costs in Great Britain more in line with other major economies in Europe and help level the playing field for British businesses. Eligibility will be determined following consultation, which will open shortly, with a review point in 2030. 13.3. The Government will also continue support for the Energy-Intensive Industries Compensation Scheme to support energy efficiency, decarbonisation, and technological innovation. We will conduct a review of the scheme by the end of this year that will set out how we plan to continue supporting energy- intensive industries when the UK Carbon Border Adjustment Mechanism is implemented in 2027.