Ministers are considering a commitment to cut soaring industrial energy prices for British companies to the same level enjoyed by competitors in France and Germany as part of its industrial strategy.
Sky News understands proposals to make energy prices more competitive are at the heart of final discussions between the Department for Business and Trade and the Treasury ahead of the publication of its industrial strategy on Monday.
Industrial electricity prices in the UK are the highest in the G7 and 46% above the median for the 31 member states of the International Energy Agency, which account for 75% of global demand.
In 2023, British businesses paid £258 per megawatt-hour for electricity compared to £178 in France and £177 in Germany. Matching those prices will require a reduction of around 27% at a cost of several billion pounds.
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Earlier this month, automotive giant Nissan said UK energy prices make its Sunderland plant its most expensive in the world.
Business secretary Jonathan Reynolds is understood to be sympathetic to business concerns, and chancellor Rachel Reeves told the CBI’s annual dinner the issue of energy prices “is a question we know we need to answer”.
Extending relief
While around 350 companies in energy-intensive industries, including steel, ceramics and cement, enjoy some relief from prices through the energy supercharger scheme, which refunds 60% of network charges and is expected to rise to 90%, there is currently no support for manufacturers.
Sky News understands ministers are considering introducing a similar scheme to support the 200,000 manufacturing businesses in the UK.
Cutting network costs entirely could save more than 20% from electricity prices.
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