UK report: over one in ten factories face closure from electricity costs

A report by trade body Make UK found that 13 percent of surveyed manufacturers said additional electricity price increases could threaten their operations. The study projected an £85 billion annual hit to the UK economy if those closures take place, with £50 billion of the loss occurring across supply chains.

Ninety percent of the 124 companies questioned reported that energy bills had risen at least moderately since 2022, and 46 percent described the increase as significant. More than half identified energy costs as their biggest challenge in the coming years.

Seven in ten firms said they had passed higher energy costs on to customers. Nearly four in ten reported delaying investment, and one in five said they had reduced staff. The report noted that manufacturers remain committed to reaching net-zero targets, with almost three-quarters identifying renewables as the route to lower power prices.

Nine in ten companies have begun energy-efficiency measures, and 63 percent have taken steps toward electrification.

The study called for moving policy costs, including green levies, from electricity bills to general taxation. It also recommended expanding eligibility for the British Industrial Competitiveness Scheme to more manufacturers and addressing grid-connection delays.

A government spokesperson said the new British Industrial Competitiveness Scheme will reduce electricity bills by up to 25 percent for over 10,000 manufacturing businesses. The spokesperson added that £470 million in support has been announced for the chemicals and ceramics sectors.