The Department for Business and Trade has opened applications for a new industrial electricity support scheme expected to cost around £600 million a year.
The British Industrial Competitiveness Scheme will exempt eligible manufacturers from the Renewables Obligation, Feed-in Tariffs and Capacity Market charges, worth up to around £40 per megawatt hour. Ministers say the scheme could cut electricity bills for more than 10,000 manufacturers by up to 25 per cent.
Government says the cost will be met through a combination of Exchequer funding, changes elsewhere in the energy system and the removal of Carbon Price Support from April 2028, rather than being passed directly onto household or other business bills.
British industrial electricity prices are high by international standards, and ministers want to narrow the gap faced by manufacturers competing with firms overseas. The government also says lower energy costs will support investment, growth and jobs, a claim that is harder to measure than the bill reduction itself.
A related scheme, the British Industry Supercharger, has been running since April 2024. It reduces electricity costs for energy intensive industries by compensating firms for network charges and other policy costs.
Ministers said in May 2026 that the Supercharger reduces eligible firms' electricity costs by around £65 to £87 per megawatt hour. For steel producers, they estimated average electricity prices would fall from £168/MWh to around £86/MWh once the full package of support was applied.
What has not yet been published is a clear outcome evaluation showing how much additional investment, production or employment resulted from those lower prices.
The Subsidy Advice Unit review of the Supercharger before launch said the case for intervention relied in part on anecdotal evidence that some firms were considering relocation because of high energy prices, and called for stronger evidence on how companies were likely to respond.
Government has since committed to reviewing the scheme, but the published material available so far is much stronger on the size of the reduction in electricity prices than on what firms did with the saving.
In its April 2026 consultation response, government said high energy costs had consistently been cited as a barrier to investment and that the scheme should therefore lead to higher investment and growth.
At that point, no quantified estimate of the investment effect had been published. A fuller impact assessment was due later alongside the supporting legislation.
Applications opened on 1 October and close on 30 November, with support due to begin from 2027.
The government has also finalised rules intended to reduce the risk that firms receive support for activity outside the sectors the scheme is meant to cover.
Relief will be shared out in proportion, site by site, according to the share of electricity consumption linked to eligible production. Sites below 25 per cent eligible use receive no exemption, those between 25 and 50 per cent receive 50 per cent relief, and sites above 50 per cent receive the full exemption.
A site just below the 50 per cent threshold can therefore receive half the support of one just above it, even where the difference in eligible activity is small.
The government plans to review the scheme formally in 2030, and it is due to run until 2035.
The published evidence so far shows the Supercharger has reduced industrial electricity prices. What it has not yet shown is how much extra investment, production or employment followed.
The new scheme, costing £600 million a year, is opening before that record is clear.