A new government scheme could significantly reduce electricity costs for eligible UK manufacturers from 2027 but businesses will need to act this autumn if they want to benefit in the first year.
The British Industrial Competitiveness Scheme (BICS) is designed to help reduce the energy cost burden on British manufacturing. For businesses that qualify, estimated savings could be around 3.5p to 4p per kWh.
For a manufacturer using 1GWh of eligible electricity a year, that could potentially mean a saving in the region of £35,000 to £40,000 annually.
With the first application window expected to run for just two months, now is the time for manufacturers to establish whether they could qualify and make sure they have the information they will need.
What is BICS?
BICS will provide eligible manufacturers with exemptions from three electricity policy costs:
- Renewables Obligation (RO)
- Feed-in Tariffs (FiT)
- Capacity Market (CM)
RO and FiT exemptions are due to begin in April 2027, followed by the Capacity Market exemption from October 2027.
Eligibility will depend on factors including the manufacturing activity undertaken, the products being made and how much of a site’s electricity is attributable to eligible manufacturing.
Businesses will also need to meet other criteria, including being registered with Companies House and importing more than 33MWh of electricity from the grid each year.
How much support could you receive?
BICS is expected to operate at individual site level rather than simply applying across an entire business.
Where less than 25% of a site’s electricity is used for eligible manufacturing, there will be no exemption. Sites where eligible manufacturing accounts for between 25% and 50% of electricity use could receive a 50% exemption, while those at 50% or above could qualify for the full exemption.
This makes good quality energy data particularly important for businesses with multiple locations, mixed-use sites or shared electricity supplies.
Why manufacturers need to act now
The first application window is expected to run from 1 October to 30 November 2026, with the first exemptions taking effect from April 2027.
Manufacturers should therefore start looking at their position before applications open.
That means establishing whether your manufacturing activities and products fall within the eligible categories, checking your SIC and product codes, understanding electricity consumption across individual sites and making sure you have the evidence required to support an application.
Missing the first application window could mean waiting until a future scheme year to access the support.
Where does BICS fit into your energy strategy?
For eligible manufacturers, BICS could make a considerable difference to future energy budgets. But it is only one part of the picture.
Wholesale prices, contracts, non-commodity charges, consumption, efficiency, onsite generation and future electricity requirements all contribute to the true cost of energy.
At Core Facility Services, we work with manufacturers to understand that complete picture.
Our energy specialists can help you review your current electricity arrangements and consumption data, identify the supplies and sites that may be relevant to BICS and understand the potential impact on future energy budgets.
With the first application window approaching, we recommend manufacturers start looking at BICS eligibility now rather than waiting until October.
Think your business could qualify? Talk to the Core Energy team on 01422 880180 and we can help you understand what BICS could mean for your organisation.
