The Government has announced plans to reduce energy costs for more than 7,000 UK businesses by slashing green levies. The move is part of a broader 10-year industrial strategy designed to support growth in manufacturing, digital, creative industries and clean energy.
Levies such as the renewables obligation, which funds older green energy projects, will be removed for eligible firms. This is expected to ease pressure on companies facing some of the highest electricity prices in the developed world.
In addition, energy-intensive sectors like steel, aluminium, glass and ceramics will benefit from a deeper discount on grid connection fees. The rate will rise from 60% to 90%, although savings for steel firms are estimated at only £15 million per year. Around 500 other businesses are also expected to gain.
The strategy includes plans to fast-track grid access for major investment projects that create large numbers of jobs. New systems are expected by year-end.
Prime Minister Keir Starmer described the package as “a turning point for Britain’s economy”, while Chancellor Rachel Reeves said it would “ease energy costs, upskill the nation and drive investment”.
The Government insists the reforms will not increase household bills or taxpayer costs. Instead, changes will be funded through broader energy system reforms.
Electricity costs are still expected to remain higher than in Germany and France due to the UK’s heavier reliance on wholesale gas prices.
A key proposal also links the UK’s carbon market with the EU’s.
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