Around 500 of the UK’s most energy-intensive businesses are set to save up to £420 million a year on electricity bills from April 2026, after ministers confirmed a major cut to network charges
in a bid to boost industrial competitiveness.
Business and Trade Secretary Peter Kyle announced on Thursday that the government will increase the discount on electricity network charges from 60% to 90% for sectors including steel, chemicals, cement, glass and paper — industries that collectively employ roughly 400,000 people. The move is designed to bring the UK’s industrial electricity prices closer to those in Europe, where firms currently face lower costs.
Officials say the measure, which follows a four-week consultation over the summer, will come at no additional cost to taxpayers and delivers on commitments set out in the government’s modern Industrial Strategy. Companies across Scotland and Wales — including Tata Steel in Port Talbot and INEOS in Grangemouth — are expected to see significant savings.
The support arrives alongside the British Industrial Competitiveness Scheme, due in 2027, which will cut energy costs by 25% for more than 7,000 firms in sectors such as aerospace, automotive and chemicals. Both initiatives will be funded through reforms to the wider energy system rather than via higher household bills or taxes.
Business and Trade Secretary Peter Kyle said:
“British industry deserves a level playing field – and this government is delivering it. We’ve heard businesses loud and clear, and this landmark support will help them stay competitive on the global stage so they can invest and grow here in the UK.
This is our Modern Industrial Strategy in action: practical, targeted support that secures jobs, attracts investment and drives our economy forward, as part of our Plan for Change”.
Encirc Glass Managing Director Sean Murphy said:
“This will be a major boost for our industry and will help British glass manufacturers compete with cheaper imports from regions that do not bear the same level of cost and regulation. By cutting the costs of energy in this way, the government is helping our industry to support thousands of jobs across the country whilst we make the transition to renewable sources of power.
We welcomed the opportunity to engage with the Minister on the pressing challenges facing our sector. Continued government support for vital industries like glass manufacturing is essential to safeguarding jobs and unlocking investment across all regions of the UK”.
Ben Martin, Policy Manager at the British Chambers of Commerce said:
“Our research shows energy costs remain a major concern, forcing many businesses who are struggling to pay their bills to raise prices.
Energy is a business essential not a luxury. The promise of cheaper bills for hundreds of energy-intensive firms through increasing the discount on electricity network charges is welcome”.
Community Union Assistant General Secretary Alasdair McDiarmid said:
“We welcome the government’s determination to reduce the industrial energy costs which are such a huge burden on energy-intensive industries like steel.
Whilst there is still more to do, the decision to increase the level of compensation for network charging costs from 60% to 90% is a huge step in the right direction. This will help avert carbon leakage, and will go some way towards boosting the competitiveness of our steel producers in line with European counterparts.
After long years of neglect, our members in the steel sector know that they now have a government which is on their side”.
The expanded Network Charging Compensation scheme is expected to reduce industrial energy bills substantially and help safeguard jobs. It forms part of the government’s wider Plan for Change, which also includes a forthcoming Connections Accelerator Service aimed at simplifying access to the electricity grid by late 2025, speeding up major investment projects and further boosting the UK’s appeal to industry.
