Make UK Calls for Action on Industrial Electricity Costs in New Report
Or risk the industrial strategy being "fatally flawed"
02.06.2025
Make UK has called for Government to take action to address sky-high industrial energy costs in the upcoming industrial strategy, or risk the plan becoming "fatally flawed."
With UK industrial energy costs four times higher than the US and 46% above global average, our new report -Tackling Electricity Prices for Manufacturers - calls on ministers to remove regressive policy levies from energy bills in order to slash costs and create a fixed electricity price to put British manufacturers on a level playing field with international competitors.
Such unfair policy levies make low-carbon energy more expensive than fossil fuels and are one of the main causes of high electricity prices for UK industry. Removing them, we estimate, would cut costs for manufacturers by 15%.
To help alleviate the burden of high costs, Government should agree a fixed price for manufacturing (a Contract for Difference), i.e. if the GB wholesale price went above the fixed price, the Government would pay manufacturers and subsidise their energy costs. If it went below the fixed price, manufacturers would pay back the difference to Government.
We recommend that the electricity price is set at £56/MWH which equates to a 10% reduction in retail prices paid by manufacturers. When the savings are added to those gained by removing the policy levies from bills, UK manufacturers would be on a par with European industrial energy bills.
Make UK has made it clear that an ambitious and effective industrial strategy is not optional. It is essential to ensuring the UK remains competitive, secure, and economically productive in the coming years. For that strategy to make the impact manufacturers across Britain desperately need, it must address the energy crisis that leaves firms at a massive competitive disadvantage - the Government must act now.