Electrification presents a significant opportunity for UK industry. Reducing reliance on international gas markets, strengthening domestic clean energy supply chains and supporting more efficient operations could deliver lasting benefits for businesses and the wider economy.
But there is a growing disconnect between the UK's clean energy ambitions and the commercial realities facing businesses expected to deliver them.
High electricity costs, lengthy grid connection delays and limited opportunities to benefit from flexibility are weakening the business case for electrification. Without action, the UK risks slowing its progress towards decarbonisation and losing industrial investment to more competitive economies.
These challenges sit at the heart of Brook Green Supply's response to the Energy Security and Net Zero Select Committee's Business and Energy Inquiry.
Drawing on our experience supporting large industrial and commercial energy users, our submission identifies four main priorities for creating the conditions businesses need to invest.
The relative cost of electricity remains one of the biggest barriers to industrial electrification.
UK industrial electricity prices are high compared with those in many industrialised European economies, while gas remains comparatively competitive. This creates a difficult commercial equation for businesses considering the transition from gas-powered processes to electricity.
For energy-intensive manufacturers competing internationally, the challenge is particularly acute. With limited ability to pass higher costs on to customers, businesses may choose to invest and manufacture in countries where electricity is more affordable.
Government interventions, including the Energy Intensive Industries scheme and British Industrial Competitiveness Scheme (BICS), are welcome. However, targeted support alone will not resolve the wider challenge.
Policy levies and network charges continue to place pressure on electricity bills, even as further infrastructure investment is needed to support the clean energy transition.
Our submission calls for a fundamental reassessment of how future electricity levies are recovered, ensuring the cost framework supports rather than discourages electrification.
Even where businesses are ready to electrify, securing the necessary grid capacity can present a significant obstacle.
Lengthy connection times and high infrastructure costs are restricting investment in new technologies, operational expansion and decarbonisation.
Our submission highlights examples of businesses facing substantial delays, including a large metals company considering a behind-the-meter solar farm but unable to obtain a grid connection until 2037, and a chemicals business facing a wait of at least ten years for the capacity needed to support its electrification plans.
The transport sector faces similar challenges. Commercial fleets and EV charge point operators must contend with the costs of securing additional capacity alongside rising fixed non-commodity charges.
These constraints have implications beyond individual projects. Without timely access to electricity infrastructure, the UK risks discouraging investment and limiting economic growth.
While grid connection reform is progressing, our response calls for greater attention to demand-side connections, ensuring businesses can access the capacity they need.
Expanding generation and network infrastructure is essential, but making better use of existing capacity can also help accommodate growing demand.
Demand-side flexibility allows businesses to adjust their electricity consumption in response to market conditions and system requirements. For organisations with suitable operations, this can reduce costs while helping to manage pressure on the grid.
However, the current charging framework does not always sufficiently reward businesses for adapting their consumption.
Ofgem's Targeted Charging Review changed how network costs are recovered, with businesses now paying a greater proportion through fixed charges. This has reduced some of the financial benefits of shifting electricity use away from peak periods, weakening the commercial case for flexibility.
Our submission calls for stronger price signals, simpler access to flexibility markets and greater incentives for demand-side response through mechanisms such as the Capacity Market.
For many industrial businesses, electrification requires substantial investment and long-term planning. Clear and consistent policy direction is essential to support those decisions.
Our submission calls for a more coordinated industrial electrification strategy, bringing together electricity cost reform, improved grid access and greater support for flexibility.
It must also recognise that direct electrification is not viable for every industrial process.
Hard-to-electrify sectors need greater certainty around alternative decarbonisation pathways, including hydrogen, biomethane and carbon capture, utilisation and storage.
Continued government support, alongside clearer policy frameworks, will help businesses evaluate these options and invest with greater confidence.
Our response calls for a more coordinated approach to industrial electrification, addressing electricity costs, removing infrastructure constraints and making it more commercially attractive for businesses to use electricity more intelligently.
Getting these conditions right will be essential to unlocking investment and ensuring UK industry can play its part in the clean energy transition.
For a more in-depth look at the Select Committee's Business and Energy Inquiry, alongside other key policy and regulatory developments shaping UK business energy, download our latest Policy and Regulation Report.