British Industrial Competitiveness Scheme

Table of Contents

1. What is the British Industrial Competitiveness Scheme?
2. Who is Eligible for BICS?
3. How Much Can You Save?
4. What Costs Are Covered?
5. Application Process and Timeline
6. Combining BICS with Other Support Schemes
7. How Energy Monitoring Helps You Qualify
8. Next Steps for Manufacturers

The UK government has launched the British Industrial Competitiveness Scheme (BICS), offering eligible manufacturers up to 25% reductions in electricity costs from 2027. With over 7,000 businesses set to benefit and potential savings of £40 per megawatt hour, this could be the lifeline many UK manufacturers need in the face of rising energy costs.

But how do you qualify? What exactly does the scheme cover? And how can you maximize your benefits? This comprehensive guide answers all your questions about the British Industrial Competitiveness Scheme.

What is the British Industrial Competitiveness Scheme (BICS)?

The British Industrial Competitiveness Scheme is a government initiative announced in June 2025 as part of the UK's Modern Industrial Strategy. It's designed to reduce the electricity cost burden on UK manufacturers and level the playing field with European competitors.

The Problem It Solves

UK manufacturers currently face electricity prices that are 46% above the International Energy Agency (IEA) median. This price disparity has made it increasingly difficult for British businesses to compete internationally, particularly with manufacturers in France and Germany who benefit from lower energy costs.

Between 2021 and 2024, non-domestic electricity prices increased by over 75%, forcing many manufacturers to:

• Reduce production
• Increase product prices (losing competitiveness)
• Delay investments in new equipment
• In some cases, relocate operations overseas

The government recognizes that high electricity costs are one of the top concerns for UK manufacturers, as identified in the PWC/Make UK Executive Survey 2025.

What BICS Does

From 2027, the British Industrial Competitiveness Scheme will provide exemptions from specific electricity policy costs for eligible manufacturers. These exemptions are expected to reduce electricity costs by up to £40 per megawatt hour—equating to approximately 25% savings for typical industrial users.

The scheme specifically targets:

• Frontier manufacturing industries within the government's eight priority sectors
• Foundational manufacturing industries that supply those frontier industries

This support will help over 7,000 electricity-intensive businesses remain competitive while supporting over 300,000 skilled jobs across the UK.

Who is Eligible for BICS?

Eligibility for the British Industrial Competitiveness Scheme is based on two main criteria: industry sector and electricity intensity.

Eligible Industry Sectors

The scheme covers manufacturers in the government's eight priority growth sectors:

1. Aerospace

• Aircraft component manufacturing
• Engine parts production
• Specialist aerospace materials
• Supply chain manufacturers

Example: Aerospace component manufacturers using electric reheat furnaces and specialized heat treatment processes.

2. Automotive

• Electric vehicle component manufacturing
• Traditional automotive parts
• Battery manufacturing
• Supply chain suppliers

3. Chemicals

• Industrial chemicals
• Specialty chemicals
• Pharmaceutical ingredients
• Chemical processing

4. Life Sciences

• Pharmaceutical manufacturing
• Medical device production
• Biotechnology
• Laboratory equipment manufacturing

5. Clean Energy

• Renewable energy equipment manufacturing
• Battery production
• Energy storage systems
• Grid infrastructure equipment

6. Defense

• Military equipment manufacturing
• Defense electronics
• Specialist materials for defense applications

7. Creative Industries

• Advanced manufacturing for creative sectors
• Specialized production equipment

8. Digital and Technology

• Semiconductor manufacturing
• Electronics production
• Data center infrastructure

Foundational Industries (Supply Chain)

Even if your business isn't directly in one of the eight priority sectors, you may still qualify if you're a foundational manufacturer supplying those sectors. This includes:

• Metal fabrication and casting
• Plastic component manufacturing
• Glass production for industrial applications
• Ceramic manufacturing
• Precision engineering
• Electronics assembly
• Packaging manufacturing (for eligible sectors)

Electricity Intensity Requirements

To qualify, your business must meet minimum electricity intensity thresholds. While final criteria are subject to consultation, expect requirements similar to existing schemes:

Likely Requirements:

• Electricity costs must represent at least 10% of Gross Value Added (GVA), OR
• Electricity costs must represent at least 3% of production value

How to Calculate Your Eligibility:

Method 1 - Electricity as % of GVA:

Annual Electricity Costs ÷ Gross Value Added × 100

Example: £200,000 electricity costs ÷ £1,800,000 GVA = 11.1% ✓ Qualifies

Method 2 - Electricity as % of Production Value:

Annual Electricity Costs ÷ Total Production Value × 100

Example: £200,000 electricity costs ÷ £5,000,000 production value = 4% ✓ Qualifies

How Much Can You Save with BICS?

The savings from the British Industrial Competitiveness Scheme can be substantial, but the exact amount depends on your electricity consumption and current costs.

Headline Savings

Government Estimates:

• Up to £40 per megawatt hour (MWh) in reduced costs
• Approximately 25% reduction in total electricity costs
• Average annual savings: £15,000-50,000 for typical manufacturers
• Large manufacturers: Savings can exceed £100,000+ annually

Real-World Examples

Small Aerospace Components Manufacturer

• Annual electricity consumption: 500 MWh
• Current electricity cost: £55,000 per year
• BICS savings: 500 MWh × £40 = £20,000 per year
• New annual cost: £35,000 (36% reduction)

Medium-Sized Automotive Supplier

• Annual electricity consumption: 2,000 MWh
• Current electricity cost: £220,000 per year
• BICS savings: 2,000 MWh × £40 = £80,000 per year
• New annual cost: £140,000 (36% reduction)

Large Chemical Processor

• Annual electricity consumption: 10,000 MWh
• Current electricity cost: £1,100,000 per year
• BICS savings: 10,000 MWh × £40 = £400,000 per year
• New annual cost: £700,000 (36% reduction)

Quick Savings Calculator

What Costs Are Covered by BICS?

The British Industrial Competitiveness Scheme provides exemptions from specific electricity policy costs that currently appear on your electricity bill.

Covered Policy Costs

1. Renewables Obligation (RO)

What it is: A scheme that requires electricity suppliers to source a percentage of electricity from renewable sources. The cost is passed to consumers.

• Current impact: Adds approximately £15-20 per MWh to industrial electricity bills
• BICS benefit: Complete exemption from RO charges

2. Feed-In Tariffs (FiT)

What it is: Support for small-scale renewable energy generation. The cost is funded through consumer bills.

• Current impact: Adds approximately £8-12 per MWh to industrial electricity bills
• BICS benefit: Complete exemption from FiT charges

3. Capacity Market (CM)

What it is: A mechanism to ensure electricity supply security by paying power stations to be available. The cost is passed to consumers.

• Current impact: Adds approximately £10-15 per MWh to industrial electricity bills
• BICS benefit: Complete exemption from CM charges

Total Combined Savings

• RO: £15-20 per MWh
• FiT: £8-12 per MWh
• CM: £10-15 per MWh
• Total: £33-47 per MWh

This aligns with the government's £40 per MWh savings estimate.

What's NOT Covered

It's important to understand that BICS does NOT exempt you from:

• Wholesale electricity costs (the actual cost of power generation)
• Network charges (though see Network Charging Compensation below)
• VAT and other taxes
• Supplier margins and operating costs

Application Process and Timeline

Understanding the timeline and application process for BICS will help you prepare.

Current Status (November 2025)

• ✓ Announced: June 2025 as part of the Modern Industrial Strategy
• ✓ Initial Consultation: Launched November 2025
• → Detailed Consultation: Expected Q1 2026
• → Final Eligibility Rules: Expected Q2-Q3 2026
• → Application Window Opens: Expected Q3-Q4 2026
• → Scheme Goes Live: January 2027

Expected Application Process

Step 1: Pre-Qualification Assessment (Q4 2026)

• Review eligibility criteria
• Gather required documentation
• Calculate electricity intensity
• Confirm industry sector qualification

Step 2: Application Submission (Q4 2026)

• Complete online application form
• Submit supporting documentation
• Provide electricity consumption data
• Prove electricity intensity
• Demonstrate industry sector eligibility

Step 3: Verification (Q4 2026 - Q1 2027)

• Government review of application
• Possible request for additional information
• Site visit (for some applicants)
• Final eligibility determination

Step 4: Certificate Issuance (Q1 2027)

• Receive BICS eligibility certificate
• Certificate valid for multiple years (likely 3-5 year periods)
• Submit certificate to electricity supplier

Step 5: Benefit Realization (From Jan 2027)

• Exemptions applied to electricity bills
• Savings appear automatically on monthly invoices
• No ongoing claims process required

Required Documentation

Based on similar schemes, expect to need:

Business Information:

• Company registration details
• VAT registration number
• Industry classification (SIC code)
• Number of employees
• Annual turnover

Electricity Data:

• 12 months of electricity bills
• Annual consumption (MWh)
• Annual electricity costs
• Supplier account details

Financial Data:

• Gross Value Added (GVA) calculation
• Production value
• Electricity intensity calculations
• Audited accounts (may be required)

How to Prepare Now

Action 1: Verify Eligibility

• Confirm you're in an eligible sector
• Calculate your electricity intensity
• Ensure you meet minimum thresholds

Action 2: Organize Documentation

• Collect 12+ months of electricity bills
• Prepare financial statements showing GVA
• Document your supply chain connections

Action 3: Implement Energy Monitoring

• Install energy monitoring systems
• Build historical consumption data
• Identify optimization opportunities
• Prove electricity intensity with data

Action 4: Stay Informed

• Subscribe to government updates
• Join industry associations
• Monitor consultation responses
• Prepare for application window

Combining BICS with Other Support Schemes

The British Industrial Competitiveness Scheme becomes even more valuable when combined with other government energy support programs.

Network Charging Compensation (NCC)

What it is: A scheme providing discounts on electricity network charges for the most energy-intensive businesses.

Eligibility:

• 500 most energy-intensive UK businesses
• Sectors: steel, chemicals, glass, ceramics, paper, cement
• Even higher electricity intensity requirements than BICS

Savings:

• Current: 60% discount on network charges (from April 2024)
• From April 2026: 90% discount on network charges
• Annual savings: Up to £420 million total across all eligible businesses
• Per business: £7+ per MWh additional savings

Can You Get Both?

Yes, if you qualify for both schemes. For the most energy-intensive manufacturers:

• BICS savings: £40 per MWh (policy costs)
• NCC savings: £7+ per MWh (network charges)
• Combined savings: £47+ per MWh

Maximum Combined Savings Potential

Example: Large Chemical Processor

• Annual consumption: 10,000 MWh
• BICS savings: £400,000/year (£40/MWh)
• NCC savings: £70,000/year (£7/MWh)
• Plus operational optimization: £150,000/year (15% through monitoring)
• Total annual savings: £620,000
• Percentage reduction: 50%+ of original electricity costs

This demonstrates why it's crucial to:

1. Qualify for all available schemes
2. Implement energy monitoring and optimization
3. Maximize your total savings potential

How Energy Monitoring Helps You Qualify for BICS

While energy monitoring isn't explicitly required for BICS eligibility, it provides several critical advantages:

1. Proving Electricity Intensity

To qualify for BICS, you must demonstrate that electricity costs represent a significant portion of your operations. Energy monitoring systems provide:

Accurate Consumption Data:

• Precise measurements of electricity use
• Historical data for calculating annual consumption
• Breakdown by process, line, or equipment
• Time-stamped records for auditing

Reliable Documentation:

• Professional reports for applications
• Charts and graphs for visual proof
• Export capabilities for official submissions
• Audit trail for verification

2. Maximizing Your Overall Savings

BICS will reduce your costs by £40/MWh, but energy monitoring can help you save an additional 15-25% through operational improvements:

Combined Savings Example:

• Before BICS: £200,000/year electricity costs
• After BICS (25% reduction): £150,000/year
• After BICS + Monitoring (additional 20% operational savings): £120,000/year
• Total savings: £80,000/year (40% reduction)
• ROI on monitoring: Payback in 6-9 months

3. Identifying Quick Wins

Even before BICS benefits start in 2027, energy monitoring helps you:

• Eliminate standby power waste
• Optimize production timing
• Reduce peak demand charges
• Fix power factor issues
• Identify equipment faults

Typical quick wins:

• 5-10% immediate savings
• 10-15% medium-term savings
• 15-20%+ long-term savings

4. Supporting Your Application

Energy monitoring data strengthens your BICS application by providing:

• Clear proof of electricity intensity
• Professional documentation
• Credible consumption figures
• Evidence of manufacturing activity
• Historical trends showing consistent usage

Our Energy Monitoring Solutions

At Industrial Control Services, we specialize in energy monitoring for manufacturers seeking to qualify for schemes like BICS:

Smart Meters & LoRa Wireless Monitoring:

• No WiFi dependency
• Quick installation (days, not weeks)
• Secure, encrypted data
• Range up to 15km

Energy Portal Platform:

• Real-time consumption dashboards
• Historical data analysis
• Automated reporting for applications
• Mobile app access
• Custom alerts

Implementation Support:

• Free initial assessment
• Professional installation
• Data analysis and reporting
• Application support documentation
• Ongoing optimization recommendations

Results:

• 16-28% operational savings
• Full documentation for BICS applications
• Support for ISO 50001 compliance
• Payback typically 9-15 months

Next Steps for Your Business

Immediate Actions (This Month)

1. Assess Your Eligibility

• Confirm you're in an eligible sector
• Calculate your electricity intensity
• Review 12 months of electricity bills
• Calculate annual MWh consumption
• Estimate potential savings (consumption × £40)

2. Organize Documentation

• Gather all recent electricity bills
• Prepare financial statements (GVA calculation)
• Document industry sector classification
• List major electricity-consuming equipment
• Map supply chain connections (if foundational industry)

3. Get Professional Support

• Consider implementing energy monitoring
• Consult with energy management specialists
• Join industry associations for updates
• Attend BICS information sessions

Short-Term Actions (Next 3 Months)

1. Implement Energy Monitoring

Even before BICS starts, energy monitoring will:

• Provide immediate operational savings (5-15%)
• Build historical data for your application
• Strengthen your eligibility documentation
• Help you optimize for maximum combined savings

2. Optimize Current Operations

While waiting for BICS:

• Eliminate standby power waste
• Improve power factor
• Optimize production timing
• Reduce peak demand charges
• Implement no-cost/low-cost improvements

3. Stay Informed

• Subscribe to government consultation updates
• Monitor industry association communications
• Track eligibility criteria as they're finalized
• Prepare for application window opening

Long-Term Planning (2025-2027)

Now - Q1 2026: Prepare documentation, implement monitoring

Q1-Q3 2026: Follow consultation outcomes, finalize applications

Q4 2026: Submit applications when window opens

Q1 2027: Receive certificates, benefits begin

2027 onwards: Realize savings, maintain compliance

Conclusion

The British Industrial Competitiveness Scheme represents a significant opportunity for UK manufacturers to reduce electricity costs and improve competitiveness. With up to £40 per MWh in savings available from 2027, now is the time to:

1. Verify your eligibility using the criteria outlined above
2. Calculate your potential savings based on your consumption
3. Prepare your documentation for the application process
4. Implement energy monitoring to strengthen your application and maximize savings
5. Stay informed as the consultation process unfolds

The manufacturers who start preparing now will be best positioned to benefit when the scheme launches in 2027. And by implementing energy monitoring today, you can start saving immediately while building the data you need for your BICS application.

Don't wait until 2027 to start saving. Contact us today for a free assessment of your BICS eligibility and potential combined savings.

Ready to Maximize Your Electricity Cost Savings?

Get a free BICS eligibility assessment and discover how much you could save by combining government support with smart meter and LoRa energy monitoring.

Get Your Free Assessment | Call Us: 07415 798544

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