Energy-intensive Welsh businesses to see electricity costs slashed

Wales-based industrial giants including Tata Steel, Vishay and Dow Silicones are among hundreds of energy-intensive businesses set to benefit from a major UK Government intervention to slash electricity costs.

The support package, announced today (Friday 31 October) by Business Secretary Peter Kyle, raises the discount on electricity network charges for eligible companies from 60% to 90%.

Around 500 sites across the UK – including steelworks, glass plants, cement producers and chemical manufacturers – will qualify, protecting jobs in industries that employ approximately 400,000 people nationwide.

Ministers say the move will tackle a long-standing disadvantage for UK manufacturers, some of whom pay the highest industrial electricity prices in the G7. The discounts will apply to firms operating in energy-hungry sectors and is projected to save firms more than £400 million a year from April 2026.

The intervention forms part of the UK’s “modern Industrial Strategy”, launched in June, and follows a four-week consultation with industry over the summer. Officials say the package will be delivered without additional cost to taxpayers, funded through internal reforms to the energy system.

Competitive 

Business Secretary Peter Kyle said the scheme would help British companies “stay competitive on the global stage” and “drive our economy forward”.

“British industry deserves a level playing field,” he said. “We’ve heard businesses loud and clear, and this landmark support will help them invest and grow here in the UK.”

Welsh Secretary Jo Stevens said the measure could be transformational for key Welsh manufacturers that have long struggled with high power prices.

“For too long they have been held back by high energy costs,” she said. “Providing cheaper bills to key sectors like manufacturing and steelmaking… will make Wales one of the best places to invest and do business.”

Industry leaders welcomed the announcement. Encirc Glass Managing Director Sean Murphy said the discount would “help British glass manufacturers compete with cheaper imports” and safeguard thousands of jobs during the transition to renewable energy. The British Chambers of Commerce said many companies had been forced to hike prices to cover soaring energy bills.

'Carbon leakage'

Unions also cautiously backed the announcement. Community Union Assistant General Secretary Alasdair McDiarmid called the reform “a huge step in the right direction” in preventing “carbon leakage” – where manufacturing shifts abroad to countries with lower costs and weaker regulations.

Today’s commitment adds to the British Industrial Competitiveness Scheme, announced earlier this year, which will cut energy costs by 25% for over 7,000 businesses from 2027 in sectors including aerospace, automotive and chemicals.

The Government also confirmed plans to launch a “Connections Accelerator Service” by the end of 2025 to speed up access to the electricity grid, reducing delays for large investment projects.