What were the key takeaways of the Industrial Strategy?
What do the announcements within the Industrial Strategy mean for your organisation?
On 23 June the Department for Business and Trade published the much-anticipated Industrial Strategy: a 10-year plan to promote business investment and growth in the UK.
The Strategy focuses on eight sectors where there’s potential for faster growth, with a bespoke 10-year plan for each sector: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services.
Here are some of the key energy takeaways of the 160-page Strategy document:
British Industrial Competitiveness Scheme
From 2027, a new British Industrial Competitiveness Scheme is set to reduce electricity costs by c.£35-40/MWh up to 2030.
The scheme will benefit manufacturing electricity intensive frontier industries such as automotive and aerospace, and foundational manufacturing industries in the supply chains, such as chemicals.
Eligible businesses will be exempt from Renewables Obligation, Feed-in Tariffs and the Capacity Market costs.
Eligibility will be determined following consultation, which is set to open shortly, with a review point in 2030.
Network Charging Compensation (NCC) Scheme
The support for the most energy-intensive industries eligible for the British Industry Supercharger package will be increased from 2026, with an uplift of the Network Charging Compensation (NCC) scheme from 60% to 90%.
Energy-Intensive Industries Compensation Scheme
The Strategy document confirmed that the government will continue support for the Energy-Intensive Industries Compensation Scheme and will conduct a review of the scheme by the end of this year.
This review will set out how the Government plans to continue supporting energy-intensive industries when the UK CBAM is implemented in 2027.
Corporate Power Purchase Agreements (CPPAs)
The Government will launch a call for evidence on how the market for CPPAs can be developed and improved for industry, including where the UK can draw from international best practice to improve competitiveness.
Reduce grid connection waiting times for strategically important projects
- A new ‘Connections Accelerator Service’ is set to provide support connecting to the grid for demand projects, including prioritising projects that “create high-quality jobs and bring the greatest economic value.” This service is expected to begin operating at the end of 2025.
- Ofgem’s end-to-end review of the connections process will set out proposals later this year to “strengthen the incentives and obligations on network companies to deliver timely connections, better customer service and more accessible connections data.”
Review of Electricity Market Arrangements (REMA)
The Government is set to conclude the policy development phase of REMA shortly. To provide investors with sufficient confidence, projects allocated to the Contracts for Difference next auction round will be given the same legacy or transitional arrangements as existing agreements if zonal pricing is implemented.
UK Carbon Border Adjustment Mechanism (CBAM)
The intention to introduce CBAM from January 2027 was reaffirmed.
“Deepen cooperation with the EU”
The Government will both explore the UK’s participation in the EU’s internal electricity market and continue technical regulatory exchanges on new energy technologies.
Furthermore, the UK Government has agreed to work towards linking the UK and EU Emissions Trading Schemes, which would create the conditions for CBAM exemptions.
Industrial Strategy Bill
The Government will introduce an Industrial Strategy Bill to implement measures within the Industrial Strategy which require primary legislation. The Bill will be also used to legislate for wider measures, such as supporting businesses with their electricity costs.
Where can I find more information?
The full Industrial Strategy document can be found on the gov.uk website.
How can Inspired help?
The announcements within the Industrial Strategy are multifaceted: For energy-intensive users the Strategy marks an opportunity for significant electricity cost reductions while potential rising non-commodity costs could add further pressure on other types of businesses.
Although more details regarding the next steps are to be released, now is the time to ensure your organisation can make the most of this changing policy landscape.
Improving energy efficiency is one of the most impactful ways to control increasing costs – and we can help you review your energy strategy.
You can speak to one of our dedicated energy experts to better understand your organisation’s position and requirements.
Please email us today at [email protected]
