The EIUG cautiously welcomes the Government’s interventions to reduce industrial electricity prices, such as the uplift in the network charging compensation scheme and continuing the schemes to compensate certain energy intensive industries (EIIs) for indirect emission costs. However, key challenges with GB’s wholesale electricity prices remain and the Government is vague about delivery of the other electricity measures.
The EIUG welcomes an uplift of the Network Charging Compensation Scheme for those eligible for the British Industry Supercharger package from 2026. This will reduce further the industrial electricity price differential due to network charges with comparable countries, though not all EIIs receive it. The EIUG therefore continues to call for removal of the scheme’s business-level test.
The remaining industrial electricity price difference of £10-16/MWh is caused by “variations in wholesale prices, driven by distinct electricity generation mixes”, according to UK Steel’s electricity price report. High GB wholesale electricity prices remain therefore one of the most pronounced challenges for the competitiveness of EIIs in the UK.
It is a relief to EIIs that Government will continue the schemes to provide compensation for the indirect emission cost due to carbon pricing, though their objective is to mitigate to risk of carbon leakage and not to support “energy efficiency, decarbonisation, and technological innovation” – that was the objective of Industrial Energy Transformation Fund. The Spending Review discontinued this fund, despite HMT having committed to consider future years alongside wider support. Government should now consider how to use UK ETS revenues for decarbonisation support to replace the IETF given the decision to explore linking with EU ETS.
Finally, the EIUG welcomes a new ‘Connections Accelerator Service’ to provide support for large demand users who want to connect to the grid, including prioritising those that create high-quality jobs and bring the greatest economic value. The EIUG would add those that reduce significant amount of greenhouse gas emissions.