UK confirms British Industrial Competitiveness Scheme exemptions for eligible electricity bills from April 2027
UK electricity suppliers must implement BICS eligibility verification and remove Renewables Obligation, Feed-in Tariff, and Capacity Market indirect-cost charges from eligible customers' bills before April 2027
Change
The UK government confirmed the final design of the British Industrial Competitiveness Scheme (BICS), exempting around 10,000 eligible manufacturers from the indirect costs of the Renewables Obligation, Feed-in Tariffs, and the Capacity Market — worth approximately £35–£40 per MWh — with the exemption taking effect from April 2027 and a one-off backdated payment in 2027 covering the period from April 2026.
Why it matters
UK electricity suppliers must build BICS eligibility verification and exemption application into billing systems before April 2027, removing the named indirect-cost line items from eligible customers' bills and processing a one-off backdated payment in 2027. Eligibility scope expanded from 7,000 to over 10,000 businesses (40% increase) covering automotive and aerospace, steel, and pharmaceuticals among others. Funding mechanism — combination of energy-system changes and Exchequer funding — is to be detailed in Budget 2026.
Implications
- — UK electricity suppliers' billing operations teams must build BICS eligibility verification and exemption application logic into billing systems before April 2027 — incorrectly applied exemptions or missed-eligible accounts breach the supplier's regulated billing obligations under the scheme.
Who is affected
- — UK electricity suppliers' billing operations teams
What to watch
- — Effective: April 2027 — BICS exemptions apply to eligible customers' electricity bills.
- — Budget 2026 — full funding mechanism for BICS to be detailed.