Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026

Baroness McIntosh of Pickering Excerpts

Wednesday 25th February 2026 Grand Committee

[Lord in Waiting/Government Whip (Lord Leong) (Lab)]

My Lords, this instrument was laid on 12 January 2026. I acknowledge that the Joint Committee on Statutory Instruments has provided a helpful review of these regulations and not drawn any special attention of this House and the other place to the instrument. I acknowledge that the Secondary Legislation Scrutiny Committee has reported this instrument as of interest to Members.

This instrument delivers one of the Government’s industrial strategy commitments to increase electricity price support to energy-intensive industries—or EIIs—through uplifting the level of relief offered by one of the measures in the British industry supercharger. EIIs include foundational manufacturing sectors, such as steel, chemicals, cement, glass, electrical components and gigafactories. These sectors are critical to the UK’s long-term economic security and for the delivery of the modern industrial strategy.

The British industry supercharger was introduced in 2024 to reduce the electricity price gap between Great Britain and comparable industrial countries in western Europe, such as France, Germany and the Netherlands. The supercharger comprises three measures: the EII exemption scheme, which offers a 100% exemption from contracts for difference, feed-in tariff and renewables obligation electricity policy levies; the capacity market exemption, which offers a 100% exemption from the costs of funding the electricity capacity market; and the network charging compensation scheme, which provides 60% compensation for the EIIs’ electricity network costs.

Despite the success of these measures in delivering critical relief to industry, the Government recognised in our industrial strategy that there remains an electricity price gap between Great Britain and comparable industrial economies in Europe. This places British EIIs at a competitive disadvantage, while increasing the risk of carbon leakage and the offshoring of vital manufacturing jobs and investment.

That is why we committed in the industrial strategy to increase the level of relief offered by the network charging compensation scheme from 60% to 90%. This will reduce electricity bills for the currently supported EIIs by a further £7 to £10 per megawatt-hour, bringing the total reduction offered by the British industry supercharger to between £65 to £87 per megawatt-hour. This uplift will ensure that the network charging compensation scheme will deliver up to £420 million of electricity price support per annum.

These regulations aim to further close the electricity price gap and ensure that foundational manufacturing is able to thrive and grow in Britain. They will help to ensure that the 550 companies that currently benefit from the supercharger will continue to retain well-paid jobs, investment and crucial supply chains across Britain’s manufacturing heartlands.

These regulations will amend the 2024 electricity support payments and levy regulations to make provision for increasing the level of relief offered through the network charging compensation scheme.

In conclusion, the regulations will help to reduce electricity costs for the most energy-intensive and trade-intensive industries, while helping to retain critical manufacturing investment and jobs in Britain. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am grateful for the opportunity to put a couple of questions on these regulations. Having represented a high energy user, a York brick company, for a number of years in the other place, I am well aware of the disproportionate energy costs for high energy-use industry. There is a theme here and it is put very well on page 8 of the impact assessment attached to the regulations, where at paragraph 6 it states:

“Electricity network costs paid by GB based EIIs are higher than in many other EU countries largely due to the discounts offered in some jurisdictions to EIIs that meet certain eligibility criteria regarding electricity consumption and off-peak grid utilisation”.


That explains the background neatly. Does the Minister agree that we have per se, across the board, higher energy costs in this country for both energy users and domestic users? What then concerns me is that it seems to be smoke and mirrors. If I have understood the purport and thrust of the regulations as best I can, the Government’s intention is to pass on to domestic consumers and non-domestic customers the differential between what the original costs would have been and now the reduction proposals under the EIIs and the supercharger scheme.

I am grateful to the Secondary Legislation Scrutiny Committee, which looked at this briefly. It states in paragraph 2 of the 49th report:

“The Impact Assessment estimates that some 320 EII businesses will save a total of £131 million per year because of the uplift to 90%, while average household electricity bills are expected to rise by not more than £1.50 per year.”


I pause there because that is £1.50 a year extra to what we are already paying. I understand that, at Prime Minister’s Questions today, the Prime Minister applauded the fact that the energy pricing cap will be reduced on average by £17, which all of us in the Committee would welcome. But NESTA, a government body set up to look at energy use, states, if you key in the question, “what is the cost per household of green energy projects?”:

“These levies make up 16% of the final price of electricity and 5.5% of the final price of gas. For a typical household, they add about £140 to the annual electricity bill and £50 to the gas bill”.


I know that all this started under a previous Government, but that does not make the situation any happier. It might be that those of us in this Room feel that we have broad shoulders and can carry this, but that is a staggering cost, especially when then adding another £1.50 to that. I also realise that 82% of the revenue raised from domestic levies comes from electricity bills and only 18% from gas bills, despite households consuming around three times as much gas each year, presumably, as electricity. My point is that this is an unacceptable additional cost.