The UK Government has announced the British Industrial Competitiveness Scheme (BICS), a major initiative designed to reduce industrial electricity costs and strengthen UK manufacturing competitiveness.
Due to launch from April 2027, subject to legislation and subsidy control approval, BICS will exempt eligible manufacturing businesses from key policy-related electricity costs, helping bring UK industrial power prices closer to European levels and supporting long-term growth across critical sectors.
What is BICS?
Due to launch from April 2027, the British Industrial Competitiveness Scheme (BICS) is a flagship policy under the UK’s Modern Industrial Strategy. It is designed to exempt eligible businesses from paying certain policy-related electricity levies, helping to bring UK industrial electricity prices closer to European levels.
From April 2027, eligible businesses are expected to receive exemptions from the Renewables Obligation (RO) and Feed-in Tariffs (FiTs). Exemption from Capacity Market (CM) costs is planned to follow from October 2027, subject to final legislation and implementation.
By reducing these non-commodity electricity costs, the scheme aims to improve international competitiveness and support long-term industrial growth.
Key Benefits
- Lower electricity bills: Expected savings of £35–£40 per megawatt-hour for qualifying firms.
- Competitiveness boost: Aligns UK industrial electricity costs with European averages.
- Long-term support: Runs from April 2027 to 2035, with a review in 2030.
- Sector-wide impact: Supports both frontier industries and foundational industries, with Government expecting the scheme to benefit over 10,000 UK manufacturers, following expansion announced in April 2026
Who Can Apply?
Eligibility is based on:
- Operating in a manufacturing frontier industry or a foundational industry supplying them.
- Meeting an electricity‑intensity threshold, i.e. ratio of energy spend to Gross Value Added to exceed a certain value. The exact threshold figure is set to be confirmed by the government following consultation later this year. Though unconfirmed the threshold is expected to be lower than that for BIS/EII, which currently is 20%, reflecting the broader objectives of BICS.
It is important to note that businesses already receiving support under the British Industry Supercharger /EII will not be able to apply for BICS. This is because both schemes cover similar electricity policy costs, including the Renewables Obligation, Feed-in Tariffs, and Capacity Market. Businesses cannot receive support under both schemes for the same exempted policy costs, helping prevent duplicate relief and ensuring compliance with subsidy control requirements. BIS is targeted at the most electricity‑intensive industries, while BICS has broader coverage and is expected to be easier to qualify for.
Why It Matters
High electricity costs have long been a barrier to UK industrial competitiveness. By easing this burden, the aim of BICS is to:
- Encourage investment and innovation.
- Strengthen supply chain resilience.
- Protect and create jobs in critical industries.
- Support the UK’s transition to a more sustainable and competitive industrial base.
Next Steps
Final eligibility criteria and application details will be published before the scheme opens in 2027.
We will continue to monitor developments and keep you posted on key details and how to prepare to apply, as the scheme moves toward implementation.
Get in touch with Bonham & Brook’s Energy Team to begin your energy assessment today. If you would like expert support in navigating these changes, contact us at sshaw@bonhamandbrook.co.uk
Senior Commercial Manager – Energy
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