The UK government is targeting a doubling of current investment levels in clean energy to more than £30bn a year by 2035, according to its newly published Industrial Strategy.
The document, which sets out a 10-year plan to boost spending and create skilled jobs across eight industrial sectors, pledges to achieve this by decarbonising the power system by the end of the decade and “creating a new era of clean energy independence”.
Ministers said efforts to break down barriers to investment would “unleash” an estimated £10bn per annum of private sector cash into electricity networks alone.
The government said it would back the strategy by delivering “targeted catalytic public investment” including £1bn supply chain funding under Great British Energy, £27.8bn available to the National Wealth Fund and £25.6bn from the British Business Bank.
“Our clean energy superpower mission means we are doubling down on Britain’s strengths and giving those industries the certainty they need to invest in the UK,” said energy secretary Ed Miliband.
“This sector plan builds on that certainty, addressing specific barriers to investment and growth in priority areas. Over the coming months and years we will work in partnership with industry to deliver on these goals.”
More than 7000 British businesses are also set to see their electricity bills slashed by up to 25% from 2027, according to the strategy.
British manufacturers currently pay some of the highest electricity prices in the developed world while businesses looking to expand or modernise have faced delays when it comes to connecting to the grid, it added.
From 2027, the new British Industrial Competitiveness Scheme will reduce electricity costs by up to £40 per megawatt hour for over 7000 electricity-intensive businesses in manufacturing sectors such as automotive, aerospace and chemicals.
These firms, which support over 300,000 skilled jobs, will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market, helping level the playing field and make them more internationally competitive, said the government.
The government is also increasing support for the most energy-intensive firms – like steel, chemicals, and glass – by covering more of the electricity network charges they normally have to pay through the British Industry Supercharger.
These businesses currently get a 60% discount on those charges, but from 2026, that will increase to 90%. This will help around 500 eligible businesses in sectors such as steel, ceramics and glass reduce their costs and protect jobs.
The reforms complement the government’s long-term mission for clean power, it said.
To ensure businesses can grow and hire without delay, the government will also deliver a new Connections Accelerator Service to streamline grid access for major investment projects – including prioritising those that create high-quality jobs and deliver significant economic benefits.
The government will work closely with the energy sector, local authorities, Welsh and Scottish governments, trade unions, and industry to design this service, which is expected to begin operating at the end of 2025.
New powers in the Planning and Infrastructure Bill, currently before Parliament, could also allow the government to reserve grid capacity for strategically important projects, cutting waiting times and unlocking growth in key sectors.
Prime Minister Keir Starmer (pictured) said: “This Industrial Strategy marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past.
“In an era of global economic instability, it delivers the long-term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people’s pockets as part of the plan for change.”
Miliband added: “For too long high electricity costs have held back British businesses, as a result of our reliance on gas sold on volatile international markets.
“As part of our modern industrial strategy we’re unlocking the potential of British industry by slashing industrial electricity prices in key sectors.
“We’re also doubling down on our clean power strengths with increased investment in growth industries from offshore wind to nuclear. This will deliver on our clean power mission and Plan for Change to bring down bills for households and businesses for good.”
RenewableUK’s deputy chief executive Jane Cooper welcomed the strategy’s focus on clean energy as one of eight high-growth sectors. She said: “By keeping a laser focus, as this Industrial Strategy does, on unlocking investment, remaining competitive, and supporting UK companies to innovate and grow, the offshore wind supply chain alone could boost the UK economy by £25bn over the next decade.
“The opportunity and vision is there, now government needs to ensure they deliver on the critical aspects of this industrial strategy. Most notably for renewables, that means ensuring the next two Contracts for Difference allocation rounds are as successful as possible, clearing large volumes of projects in a stable market framework to reduce costs.”
Laith Whitwham, senior policy advisor at the climate think tank E3G, also praised the strategy, saying: “This is a landmark moment. After years of delay, the government has stepped up with a serious industrial strategy that backs clean energy and our industrial heartlands.
“This strategy cuts the sky-high electricity prices driven by gas dependency and gives British industry the shot in the arm it needs to lead the charge to a clean economy.”