The Government's new 10-year Industrial Strategy hopes to reduce energy bills by up to 25 per cent for UK businesses, amid criticism that it will require subsides and a watering down of green levies.

The UK currently has some of the highest energy prices in the world, and any business looking to boost its competitiveness will need to wait for a two-year long consultation before having any sign as to whether it will be eligible for exemptions. It has also been reported that the retail and leisure sectors will not be included in the strategy.

The Government says that more than 7,000 British businesses could see their electricity bills “slashed” from 2027 as the Government unveiled the plan, with a new British Industrial Competitiveness Scheme that will reduce electricity costs by up to £40 per MWh for electricity-intensive businesses in manufacturing sectors like automotive, aerospace and chemicals. These firms will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

The Government said: “These reforms complement the Government’s long-term mission for clean power, which is the only way to bring down bills for good by ending the UK’s dependency on volatile fossil fuel markets.” However, also potentially unhappy are some of those in the renewable sector, who worry over the impact that changes to the green levy could have for the Contracts for Difference scheme.

The Government has also said that it intends to use additional funds from the strengthening of UK carbon pricing, including as a result of linking with the EU carbon market to fund these exemptions and subsidies. Quite how that works I guess we’ll see.

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