Energy-heavy industries to receive boost in financial aid for network charges under an updated compensation plan
The UK government has launched a consultation seeking feedback on a proposal to increase the relief level offered through the Network Charging Compensation (NCC) scheme, with the aim of raising it from the current 60% to 90%. This move is seen as a significant step towards reducing industrial electricity costs and improving competitiveness.
The consultation is open to a broad range of audiences, including energy intensive industries, whether currently benefitting or not from the existing exemption scheme, energy suppliers, other electricity consumers, trade bodies, consumer associations, devolved governments, and other interested parties.
The proposal has received strong support from various sectors. Gareth Stace, Director General of UK Steel and Chair of the Energy Intensive Users Group, described the uplift under the Government’s Supercharger scheme as "very welcome and much-needed" for achieving competitive electricity prices in steel and other foundation industries. He noted that these changes reflect long-advocated solutions addressing uncompetitive industrial electricity costs.
UK Steel further elaborated that raising the NCC from 60% to 90% will lower electricity prices by about £6.5/MWh for the steel sector, amounting to approximately £14.5 million in annual savings. They welcomed alignment with what Germany and France offer and highlighted that this is part of broader reforms to tackle energy costs.
Trade bodies and industry firms such as British Steel and INEOS are among the beneficiaries, with the uplift seen as a major boost that will bring UK energy costs closer to European competitors, helping secure jobs and attract investment. The estimated financial impact, according to multiple sources, includes potential savings of up to £420 million per year for about 500 UK energy-intensive companies once the 90% discount is implemented from 2026.
While the available information does not explicitly report dissenting opinions from energy suppliers, consumer associations, or devolved governments, the overall framing suggests broad support from industrial users and trade bodies. The government appears to welcome detailed consultation feedback from all parties to shape final policy.
The consultation is related to a measure under the Industrial Strategy, and it is expected to contribute positively to the UK's industrial sector by providing relief to energy-intensive industries and promoting a more competitive and sustainable industrial landscape.
The consultation, related to a measure under the Industrial Strategy, invites feedback from energy suppliers, consumer associations, devolved governments, and other interested parties. This feedback is crucial in shaping the final policy, which aims to increase the relief level offered through the Network Charging Compensation (NCC) scheme from 60% to 90%, a move that is expected to strengthen the finance sector by lowering energy costs for industrial sectors such as steel and energy-intensive industries.
The proposed increase in the NCC level is anticipated to bring UK energy costs closer to European competitors, providing potential annual savings of up to £420 million for about 500 UK energy-intensive companies once the 90% discount is implemented from 2026, as stated by multiple sources.
