UK sales decline by approximately £800 million due to price reductions in Eon's operations
The UK government has announced a new Industrial Strategy aimed at significantly reducing energy costs for businesses, particularly energy-intensive industries. The strategy, launched in mid-2025, addresses two major barriers for UK industry - high electricity prices and long grid connection times.
Key upcoming changes include electricity cost reductions for over 7,000 businesses, exemptions from certain energy payments, increased discounts on network charges for the most energy-intensive users, and improved grid connection processes.
From 2027, electricity-intensive businesses, such as those in the automotive, aerospace, chemicals, steel, ceramics, and glassmaking sectors, will benefit from electricity bill reductions of up to £40 per megawatt-hour. This could potentially cut costs by up to 25%. Eligible businesses will also be exempt from environmental levies like the Renewables Obligation, Feed-in Tariffs, and the Capacity Market, reducing their overall energy expenditure.
Around 500 of the most energy-intensive firms will see their discount on electricity network charges rise from 60% to 90% starting in 2026 under the British Industry Supercharger scheme. This targets key UK supply chain sectors.
The energy cost reductions will be funded through energy system reforms rather than taxpayer money or increased household energy bills, maintaining fiscal discipline while encouraging industrial growth. By the end of 2025, the government plans to launch a Connections Accelerator Service to speed up grid connections for new factories and major projects, helping businesses expand or modernize without lengthy delays.
Eon, a major player in the UK energy sector, has reported a return to profit after being in the red since 2020. The latest results show that Eon's UK arm returned to profit with a pre-tax profit increase from £49m to £52m over the same 12-month period. However, due to a fall in its turnover, Eon's UK division went from making an operating profit of £20m to a loss of £58m.
Concerns remain that energy bills may still have a significant impact later in the year. Despite this, energy prices for 21 million households in England, Scotland, and Wales have fallen under Ofgem's latest price cap on the same day as Eon's results were published. The average number of people employed by Eon in the UK has also increased from 795 to 905 during the year.
This Industrial Strategy is designed to unlock investment, create skilled jobs, and boost competitiveness in the global market. Business and Trade Secretary Jonathan Reynolds emphasized that tackling energy costs directly responds to industry needs and is a bold step toward revitalizing Britain's industrial base.
- The newly announced Industrial Strategy in the UK, designed to lower energy costs mainly for energy-intensive industries such as automotive, aerospace, chemicals, steel, ceramics, and glassmaking, will provide electricity bill reductions of up to £40 per megawatt-hour from 2027, potentially cutting costs by up to 25%.
- To further encourage energy-intensive firms, the British Industry Supercharger scheme, starting in 2026, will increase the discount on electricity network charges for around 500 businesses from 60% to 90%, targeting key UK supply chain sectors.
