Post updated 27/04/26
BICS: Why now is the moment to rethink your energy contract strategy
Against a backdrop of persistently high electricity costs, volatile wholesale markets and increasing policy intervention, many UK businesses are locked into energy contracts that no longer reflect the reality ahead. With the British Industrial Competitiveness Scheme (BICS) set to materially reduce policy‑driven electricity costs for thousands of manufacturers from April 2027, the assumptions that underpinned past procurement decisions are starting to fall away.
For qualifying electricity consumers, BICS is not just a future bill reduction — it represents a clear signal that now is the moment to reassess contract structure, flexibility and risk strategy, before opportunities are missed.
Here’s what you need to know.
What is the British Industrial Competitiveness Scheme (BICS)?
BICS is a new government scheme aimed at reducing industrial electricity costs from April 2027. Its goal is simple: help UK industries compete on a global stage by removing a significant portion of non-commodity charges from eligible businesses’ electricity bills.
Eligible businesses could see up to a 25% reduction in their electricity bills as the planned savings are at least £35 - £40/MWh (3.5 – 4 p/kWh), obtained from the removal of Renewables Obligation (RO), Feed-in-Tariff (FiT) and Capacity Market (CM) charges. From April 2027, RO and FiT relief will begin, whilst CM discounts will commence from October 2027.
In addition, the government has confirmed a one‑off backdated payment in 2027, compensating eligible businesses for support they would have received from
April 2026.
Eligibility is determined on a combination of your SIC and Harmonised System (HS) codes and targets UK growth sectors, including advanced manufacturing, clean energy, life sciences and digital and technologies.
A full list of eligible sectors and products can be found on the governments website.
Part of the Modern Industrial Strategy, it’s a structural change on a scale we don’t often see, and the businesses that prepare early will be best positioned to capture the value.
How will BICS support be calculated?
BICS operates on a site‑by‑site basis, meaning eligibility and support are assessed at individual meter level rather than being applied uniformly across an entire business group.
The level of support available depends on how electricity is used at each site:
- Less than 25% of on‑site electricity used for eligible manufacturing activities: no exemption
- 25% to 50% of on‑site electricity used for eligible manufacturing activities: 50% exemption
- 50% or more of on‑site electricity used for eligible manufacturing activities: 100% exemption
For multi‑site businesses, this distinction is critical. Two facilities under the same ownership may receive very different levels of support depending on their operational activity and electricity usage profile.
What’s the impact of BICS on businesses?
The financial savings could be significant. For high-usage organisations, the removal of some non-commodity costs could deliver six or even seven-figure annual savings. But the impact isn’t just about reducing costs - it’s about the flexibility organisations gain to make better long-term decisions.
However, this opportunity comes with added complexity. Many businesses will understandably be considering energy contract renewals well ahead of 2027. The challenge is that committing to certain contract structures now, particularly those that fix or bundle non‑commodity charges, risks diluting the value of future BICS relief. As BICS discounts will be calculated against specific policy cost components, locking these elements into today’s contracts could make future savings harder to identify, reconcile, or fully realise.
We’re already seeing suppliers offering long-dated fixed contracts that extend beyond April 2027. For businesses without specialist support, it’s easy to assume a longer-term fixed deal provides certainty. But when it comes to BICS, that certainty could come at the expense of real value.
Why you should speak to a trusted energy partner now
The introduction of BICS changes the strategic picture. Businesses can’t rely on a one-size-fits-all contract and shouldn’t navigate this shift alone. Working with an experienced TPI or consultancy is the safest way to avoid costly mistakes and make sure your contract structure is fit for the future.
Here’s why:
1. You need a contract that protects your ability to access BICS savings
Fixed price contracts that include non-commodity charges beyond 2027 will make the calculation of BICS savings extremely difficult as the applicable cost elements are bundled into you unit rates.
A specialist partner can help you assess whether a more flexible approach, such as a pass-through contract, may offer better long-term value and avoid overpayment once the scheme goes live.
2. Invoicing will get more complex, expertise matters
Pass-through arrangements introduce more line-by-line detail, reconciliation and supplier-side interpretation. Without rigorous invoice validation and experienced oversight, errors can easily go unnoticed.
At Adalta Energy, our team has proven, industry-leading accuracy in this area and frequently challenges invoices that other consultants accept.
3. You need clarity on eligibility and a realistic savings forecast
The eligible business must be in a manufacturing frontier industry, as defined by a specific SIC4 code and HS6 code, or a foundational industry supplying those sectors. We provide a free eligibility check and model what your savings could look like under BICS, helping you plan ahead with confidence.
4. Suppliers will manage this change in different ways
Our long-standing, executive-level supplier relationships mean we understand how each supplier is likely to implement the scheme, and how to negotiate terms that protect your interests.
5. You need a partner fully aligned to your long-term goals
BICS is not a short-term tactical win; it will shape energy strategy for years. You need a partner who has the commercial, sustainability and credit expertise to support you through this transition and beyond.
Avoiding the common pitfalls
As with any major policy shift, we expect a rise in cold calling, overpromising and fee-driven opportunism.
Businesses should be particularly wary of:
- Advisers pushing fixed deals beyond April 2027
- Any consultancy charging additional fees for eligibility reviews
- Any consultancy proposing a value share (%) approach for successful applications
- A lack of transparency around how the savings will be applied to your contract
- Broad claims about future exemptions without data-backed evidence
At Adalta Energy, our approach is different. There are no hidden fees, just clear, well-informed guidance that’s designed to protect your business and help you make the right decision at the right time.
How Adalta Energy can help you prepare for BICS
We’ve supported some of the largest and most complex energy users in the UK and we bring the same level of detail, diligence and care to every business we work with.
For BICS, we offer:
- Free eligibility checks and saving forecasts
- Contract reviews and renewal strategy support
- Guidance on suitable contract types, including pass-through contracts, to take advantage of flexibility and manage the increased complexity of invoicing
You’ll gain a dedicated, expert partner who stays with you throughout your contract, ensuring you benefit from BICS from day one and avoid the risks that come with poorly structured deals.
It’s time to lock in long-term value
BICS could be one of the most important developments in UK industrial energy policy for a generation. The businesses that act early and seek the right expertise will be the ones that lock in long-term value.
If you want to ensure you’re prepared, protected and positioned to benefit fully from the scheme, now is the time to talk to a specialist.
We’re here to help you make sense of BICS and secure the right contract for your business. Speak to our team today.
