UK Industrial Electricity Prices: 12 Hard Facts

Electricity is a cost every business carries, but for the ones that melt, mould, bake or forge things it is often the difference between profit and closure. On this measure the UK is an outlier, and not in a good way. Here are 12 hard facts on UK industrial electricity prices, each drawn from an official or authoritative source.

How high they really are

The highest in the developed world

In 2024 the UK had the highest industrial electricity prices of any country reporting to the International Energy Agency, at about 26.6 pence per kWh. Government figures confirm the UK was top, or close to it, in almost every industrial consumption band. British industry does not just pay a lot for power, it pays more than almost anyone.¹

But not for households

The picture is narrower than the headlines suggest. Independent fact-checking confirms the UK is top of the international table for industrial users but not for domestic ones, where several European countries are more expensive. The penalty falls specifically on the businesses that use the most power.²

More than four times the US price

The transatlantic gap is stark. UK industrial users pay more than four times what their counterparts pay in the United States, where cheap domestic gas and different market rules keep power costs low. For an energy-hungry plant, that gap is decisive when a parent company decides where to invest.³

A running penalty against Germany and France

Even against near neighbours the UK is dearer. UK steelmakers paid an average of about 66 pounds per MWh in 2024/25, against roughly 50 in Germany and 43 in France, a gap estimated to cost UK producers tens of millions of pounds a year more than European rivals for the same output.⁴

Why they are so high

Gas sets the price almost all the time

The core problem is how the market prices power. Under marginal pricing, the most expensive plant needed to meet demand sets the price for everyone, and in Britain that is usually gas: gas set the wholesale electricity price around 97 percent of the time. When gas spikes, the whole electricity bill moves with it.⁵

Britain leans on gas more than its rivals

That exposure is baked into the generation mix. In 2024 gas accounted for around 30 percent of UK electricity generation, against about 16 percent in Germany and just 3 percent in France. The more a country depends on gas-fired power, the more its industry is hostage to global gas prices.⁶

Network charges are climbing steeply

Wholesale energy is only part of the bill. Network charges, levies and policy costs make up a large and growing share, and they are rising: transmission network charges are set to increase by around 60 percent from April 2026. For a factory running around the clock, those non-energy costs are a permanent surcharge.⁷

Billions in policy costs sit on the bill

Layered on top are the costs of energy and climate policy. Industry bodies estimate around 5.7 billion pounds of policy costs are levied on electricity each year, and that removing them could cut non-domestic prices by up to 15 percent. Much of what makes UK power expensive is decided in Whitehall, not on the trading floor.⁸

What it does to industry

Output has collapsed to a 35-year low

The effect on the shop floor is measurable. Real output of the UK's energy-intensive industries fell by about a third between early 2021 and the end of 2024, to its lowest level since the series began in 1990. High power prices do not just squeeze margins, they shut production down.⁹

The furnaces are going out

The symbol of the squeeze is steel. Tata Steel closed the last blast furnace at Port Talbot in 2024, with around 2,800 job losses, after the plant reported losses running past a million pounds a day, with energy among the cited pressures. When a country's biggest steelworks cannot make money, the warning could not be clearer.¹⁰

Manufacturers are already voting with their feet

The response is relocation. A survey by the manufacturers' body found that 9 percent of manufacturers have already moved production overseas because of rising costs, with a further 16 percent considering it, as government prepares a scheme to cut industrial power bills from 2027. Every plant that leaves takes its supply chain, and its insolvency risk, with it.¹¹

Our read: the bill lands in the insolvency data

High energy costs are not an abstract competitiveness metric, they are a cash-flow problem that ends in failure. The pressure on energy-intensive manufacturers shows up directly in the insolvency record, where manufacturing is consistently among the harder-hit sectors. You can watch it happen case by case in the latest UK insolvencies; tracking it early is exactly what the InsolvencyRadar service is built for.¹²