Post: Energy costs squeezing UK manufacturers, says Make UK

Energy costs squeezing UK manufacturers, says Make UK

A recent report by Make UK notes that Britain risks becoming the first advanced economy to have an industrial strategy without a significant industrial base to support as an increasing number of manufacturers are moving production overseas or, are actively considering doing so, in response to the soaring costs of the UK business environment. One key area noted that pressure from energy costs.

In this article we explore strategies to help businesses take back control of energy spend.

Under pressure

The Make UK Manufacturing Outlook report for Q2 2026, published on 15 June, notes that business confidence has fallen to its lowest level since the end of 2022, dropping from 6.5 to 6.0 on a ten-point scale. Investment intentions have also dropped from +20% to just +8% in a single quarter.

The geopolitical disruption caused by the US-Iran conflict, which began in late February 2026, has sent oil and gas prices surging once more and the sector is feeling it acutely. UK price-setting balances climbed to +36%, the highest since mid-2023, yet UK margins have fallen to -15%. Export margins dropped from +4% to -6%. Manufacturers are raising prices, but not fast enough or far enough to cover their rising input costs. Energy is a primary driver of those input costs. The report concludes that action on industrial energy costs is no longer just a competitiveness issue. It is a question of controlling inflation across the entire UK economy.

Make UK CEO Stephen Phipson CBE said: “Britain faces deindustrialisation unless manufacturers get relief from high energy prices […] Electricity and gas in the UK are far too expensive and it’s costing our country steeply. We cannot afford to be delayed by political upheaval, or by further consultations. For the sake of thousands of jobs across Britain, the Government needs to step in and act now to expand the British Industrial Competitiveness Scheme to all of the manufacturing industry and speed up delivery.”

Make UK is continuing to call for the proposed business energy support scheme to be brought forward from 2027 and, expanded to 130,000 companies across the whole manufacturing sector, not just the 10,000 companies it is currently aimed at helping.

How GridBeyond supports businesses

The Make UK report is a clear warning. The inflationary spiral in UK manufacturing is accelerating, confidence is declining, and energy costs are central to both challenges. But waiting for policy action is not a strategy. GridBeyond works with manufacturers across Great Britain and Northern Ireland to turn energy from a cost burden into a managed, and even revenue-generating, part of the business. As the sector faces another period of severe energy market disruption, the businesses that will emerge strongest are those that take control of their energy today.

GridBeyond’s AI-powered platform enables manufacturers to participate in grid flexibility markets, earning revenue by adjusting energy consumption at peak times. Rather than simply absorbing high energy costs, businesses become active participants in the energy market; generating income from assets and processes they already own. For energy-intensive manufacturers, this can represent a significant contribution to the bottom line.

The Make UK report highlights that energy costs are eroding margins faster than businesses can respond with price increases. GridBeyond’s digital twin technology (FlexPilot) delivers real-time visibility of energy consumption across a site or portfolio, enabling operations teams to identify waste, optimise load profiles, and reduce unnecessary spend. In an environment where every percentage point of margin matters, intelligent energy monitoring is a competitive necessity.

For manufacturers with on-site generation, battery storage, or flexible loads, GridBeyond’s Energy Management System (EMS) orchestrates these assets to minimise exposure to peak tariffs and maximise the value extracted from flexible capacity, without requiring the large-scale investment that current cash constraints make difficult to justify.

Book a meeting to find out how GridBeyond can help your business reduce energy costs and unlock flexibility revenue.