The UK Government’s “British Industry Supercharger” is a welcome support package for energy-intensive businesses in a time of rising energy costs and a push for sustainability.
The initiative, which was rolled out in April 2024, aims to enhance the competitiveness of the UK’s industrial sector by providing financial exemptions from certain non-commodity costs.
The impacts of the gas price crisis are still being felt by businesses in their energy procurement contracts and this is hampering our ability to compete with other countries’ manufacturing output.
Here’s what you need to know about the scheme and how it might benefit your business.
What is the British Industry Supercharger?
Launched as part of the UK Government’s broader energy strategy, the scheme provides exemptions which will save energy intensive industries (ETII) an estimated £320 million to £410 million in 2025.
The scope of the scheme is expected to encompass more than 370 businesses, employing 400,000 people.
The scheme was announced by the government in 2023 and has been launched following consultation with relevant business leaders.
It has been devised to support both existing businesses in competition globally; and the future growth of the UK’s industrial sector into markets such as Electric Vehicle (EV) battery manufacturing.
From which charges are beneficiaries exempt?
ETIIs are exempt from a range of non-commodity costs. That means the itemised costs in your energy bill other than the price of your energy consumption (commodity costs).
- Small-scale Feed in Tariff (FiT)
- Contracts for Difference (CfD)
- Renewables Obligation (RO)
- GB Capacity Market costs
There will also be a 60% reduction applied to network charges such as TNUoS and DUoS within non-commodity costs.
The scale of this intervention should demonstrate how damaged the UK’s energy market has become following the gas price crisis. The outcome of this significant investment is expected to equalise UK ETII energy costs with competitors globally; essentially allowing our businesses to become more competitive.
It is estimated that this will save ETII businesses £24 to £31 per 1,000 KWhs (1MWh).
How do I access the British Industry Supercharger scheme?
You should ensure that your SIC code is correctly registered with Companies House in order to be classified as an ETII business.
ETIIs include steel, metal, chemical, cement, glass and paper manufacturing businesses.
The scheme was rolled out in April 2024 and will be applied to bills moving forwards.
How has the scheme been received?
As quoted on the government’s official British Industry Supercharger release, Arjan Geveke, Director of the Energy Intensive Users Group, said: “We welcome the implementation of the various measures to reduce industrial electricity prices.
“For those companies eligible for support, these measures will bring our industrial electricity prices closer to those in other countries and help the competitiveness and decarbonisation of energy intensive industries in Great Britain.”
The scheme has also drawn praise from industry bodies in paper, glass, chemicals and steel.
The British Industry Supercharger is not the only recent government intervention for larger businesses. The Energy Bills Relief and Discount Schemes were also used to support these businesses whose bottom lines are most exposed to continuing high energy costs.
Conclusion
This latest intervention is demonstrative of how important energy procurement continues to be to UK industry.
If your business would like support to devise a comprehensive energy strategy, Procure Smart offers free, no-obligation consultations. Our advice is free: simply complete a form below to speak to one of our experts.
