Despite a new government intent on reindustrialisation and a number of favourable geographical and geological factors, the UK has among the highest energy prices in the developed world. This is particularly true for industrial electricity customers. According to research supported by Imperial College London, UK manufacturers spend significantly more per unit of electricity than many international competitors and some firms are reporting they are struggling to keep the lights on. Various organisations, including Make UK and Octopus Energy, have called for reform of the UK's energy market, arguing that current arrangements place domestic industry at a competitive disadvantage. The government's immediate response is BICS, the British Industrial Competitiveness Scheme.
The issue is particularly significant because manufacturing remains an important driver of exports, regional growth and productivity. Electricity costs can influence decisions about where facilities are located, whether production capacity is expanded, and how quickly businesses can invest in lower-carbon technologies. Against a backdrop of industrial strategy, energy transition and economic growth ambitions, reducing the cost burden on energy-intensive manufacturers has become an increasingly prominent policy objective.
What is BICS?
Part of a broader UK industrial strategy targeting growth, investment and global competitiveness, BICS is an initiative aimed at 10,000 UK manufacturers and energy-intensive businesses offering reductions in electricity bills by up to 25%.
BICS works by removing three elements of a typical electricity bill, namely:
Renewables Obligation (RO)
Feed-in Tariffs (FiT)
Capacity Market (CM) charges
These charges have accumulated over time as part of wider energy policy arrangements. BICS does not reduce wholesale electricity prices themselves, but instead removes specific policy-related costs from eligible businesses' bills. The scheme is intended to provide targeted support while the government considers longer-term reforms to industrial energy pricing and market structures.
Who is eligible?
Companies in two key categories are the targets of the scheme: 'IS-8' manufacturers within growth driving sectors, and manufacturing foundational industries (designated according to Standard Industrial Classification (SIC) codes), and producing goods which are eligible according to Harmonised System (HS) codes.
Potentially eligible businesses may operate in sectors such as steel, metals, chemicals, glass, ceramics, aerospace, automotive manufacturing and advanced engineering. However, businesses should not assume eligibility solely because they operate within one of these sectors. Qualification depends on the specific SIC and HS codes associated with the business and its products. Organisations considering an application should therefore carefully review the detailed eligibility criteria before investing significant time in the application process.
What evidence is needed?
In order to qualify for BICS, a dossier of evidence needs to be compiled, including:
Registration at Companies House, details of the submitting person and specific addresses for every manufacturing site covered by the application.
Inclusion of accurate SIC and HS codes.
Grid electricity bills covering the most recent six consecutive months within the previous 12 months, identifying the Meter Point Administration Number (MPAN), supplier, billing period and supply address.
Proof each site consumes at least 33MWh of grid-supplied electricity per year, with more than 16.5MWh used across the six-month evidence period.
Formal confirmation or relevant bills from the electricity supplier proving that policy levies (RO, FiT and CM) are being paid and that the arrangement falls within BICS scope.
Evidence of meeting the relevant electricity intensity threshold, namely 0.9% for frontier industries and 2.7% for foundational industries.
Accurate documentation is likely to be critical, particularly where multiple sites are involved. Businesses should ensure all information is internally consistent and supported by appropriate records before submitting an application.
Preparing your application
A common challenge in many support schemes is not establishing eligibility itself, but assembling the evidence required to demonstrate compliance.
Potential issues may include obtaining confirmations from electricity suppliers, collecting billing information across multiple sites, verifying MPAN details and ensuring SIC and HS code information is accurate and up to date. Organisations operating several manufacturing facilities may need close coordination between finance, operations, procurement, facilities management and compliance teams.
Undertaking a preliminary internal review can help identify any gaps in documentation before submission. Early preparation may also reduce the risk of delays arising from requests for additional information or clarification from the Department for Business and Trade (DBT).
When and how to apply
The first application window for BICS opened on 1 October and closes on 30 November at 11:59pm via the BICS portal. There is also an eligibility checker available for potential applicants.
DBT confirmation for successful applicants is expected by 8 January 2027, and support begins in April 2027, including a one-off backdated payment covering support from April 2026 onwards for first-round applicants.
Businesses should consider gathering evidence as early as possible. This may be particularly important for larger manufacturers with multiple locations, where assembling the required documentation may involve a number of internal stakeholders and external suppliers.
Once a site is approved for BICS, the exemption will be valid for five years. For RO and FiT exemptions, the BICS exemption will remain valid until April of the final year. For CM exemptions, the exemption will remain valid until October of the final year.
Continued eligibility will be subject to both:
Submission of an annual declaration; and
A review after the second year of support.
Wider context
Make UK is one of the latest organisations to call for energy market reform, lobbying for a Targeted Electrification Discount Scheme which it argues could enable substantial savings for businesses switching from gas to electricity-based industrial processes.
BICS also sits within a wider debate around industrial competitiveness, electricity market reform, network charging arrangements and grid capacity constraints. Manufacturers continue to argue that the UK's relatively high industrial electricity prices make investment decisions more challenging, particularly as businesses are encouraged to electrify operations in support of decarbonisation goals.
Many stakeholders view BICS as a positive and potentially significant intervention, but not a complete solution. Broader reforms, including faster grid connections, enhanced electricity infrastructure and measures to improve long-term energy affordability, are likely to remain key policy issues for industry groups over the coming years.
Continuing concerns regarding grid capacity and connection delays are an added factor. The UK has managed to cut industrial emissions significantly since 1990, but industrial electricity prices have risen substantially in real terms over the same period, while gas prices have experienced repeated spikes linked to geopolitical events. For many manufacturers, the challenge remains how to remain internationally competitive whilst simultaneously investing in decarbonisation and future growth.
