A Renewed Focus on Industrial Growth

In June 2025, the UK Government announced its Modern Industrial Strategy. The strategy set out a 10-year plan for the country’s economic future. Focused on high-growth sectors, its purpose is to boost productivity, increase investment, create jobs and promote net zero.

It also intends to make industrial competitiveness a cornerstone of its economic and energy policy, recognising the need to strengthen supply chains and reduce the cost gap with international markets.

Building on this agenda, the Department for Business and Trade (DBT) has now released detailed Industrial Strategy Sector Plans and announced the upcoming British Industrial Competitiveness Scheme (BICS), both designed to secure long-term growth for energy-intensive industries.

Industrial Strategy Sector Plan

Detailed Industrial Strategy Sector Plans have now been published for eight key industries identified as having the greatest growth potential over the next decade: Advanced Manufacturing; Clean Energy; Creative Industries; Defence; Digital & Technologies; Financial Services; Life Sciences; and Professional & Business Services.

These “IS-8” sectors are considered critical to ensuring the UK’s long-term economic security, competitiveness, and sustainability.

For business energy buyers this signals that government industrial strategy and energy policy are now tightly aligned, with electricity costs and competitiveness forming a central pillar of the plan.

The British Industrial Competitiveness Scheme (BICS)

At the heart of the strategy is the British Industrial Competitiveness Scheme (BICS), due to launch in 2027. Designed to make UK electricity costs more competitive with Europe, the scheme is intended to deliver meaningful cost reductions for thousands of businesses in energy-intensive sectors.

Key Features of BICS:

• Electricity price relief – From 2027, eligible businesses will see electricity costs reduced by £35–40/MWh, with support in place until at least 2030.

• Industry focus – Support will target frontier industries such as automotive and aerospace, alongside foundational manufacturing sectors including chemicals. Supply chain businesses are expected to benefit as well.

• Exemptions from green levies – Participants will be exempt from the costs of the Renewables Obligation, Feed-in Tariffs, and the Capacity Market.

• Global competitiveness – By aligning UK costs with major European economies, the scheme is designed to level the playing field for British manufacturers.

• Eligibility under review – A formal consultation will determine which businesses qualify, with a review scheduled in 2030.

For energy buyers, this could represent a step-change in procurement strategy, especially for organisations managing multi-year contracts or long-term energy risk.

Additional Support for Energy-Intensive Industries

Alongside BICS, the government is expanding its British Industry Supercharger package. From 2026, around 500 of the UK’s most energy-intensive businesses will benefit from an uplift in the Network Charging Compensation (NCC) scheme – moving from 60% to 90% relief.

This enhanced support provides extra price relief on top of BICS, further narrowing the competitive gap with neighbouring countries and strengthening the UK’s industrial base.

Why This Matters for Business Energy Buyers

For procurement and sustainability leaders, the DBT’s strategy signals several important developments:

1. Price certainty and competitiveness – The UK’s historically higher electricity prices have long been a concern for industry. BICS aims to address this, promising tangible relief for energy-intensive sectors.
2. Planning for 2027 and beyond – Energy buyers should now factor the upcoming scheme into long-term procurement and risk management strategies.
3. Net zero alignment – By reducing costs while maintaining decarbonisation goals, the strategy reinforces the importance of integrating energy procurement with sustainability objectives.
4. Opportunities in supply chains – Even if your business is not directly eligible, benefits could cascade through supply chains in the form of improved stability and competitiveness.

Next Steps for Businesses

With consultation on eligibility due to open shortly, businesses should:

• Engage in the consultation to help shape the scope of the scheme.
• Review long-term contracts and hedging strategies with 2027–2030 in mind.
• Model potential savings to understand the financial impact on budgets and investment plans.
• Align energy and sustainability teams to maximise opportunities from both cost relief and decarbonisation.

Final Thoughts

The UK government’s Industrial Strategy is more than a policy announcement – it’s a signal of intent to rebalance the economy, strengthen resilience, and ensure that British industry competes on the world stage.

For energy buyers, the British Industrial Competitiveness Scheme could deliver significant cost relief, but the real opportunity lies in preparing now: reshaping procurement strategies, engaging with the consultation, and aligning commercial and sustainability priorities to capture long-term value.

The Sector Plans are available to view on the government website here. As ever, if you require any support in understanding what this means for your industry and/or specific business, feel free to get in touch.

Article by Neil Fraser