22nd June 2026
UK industry is no longer waiting for energy prices to fall. Instead, businesses are adapting by using less energy, generating their own power, relocating investment, or in some cases closing altogether. The question is whether these changes will make Britain more competitive in the long run—or simply leave it with fewer energy-intensive industries.
UK industry has been reacting in several different ways, and the results are creating a divide between winners and losers.
1. Energy-intensive industries are shrinking
The biggest pressure has fallen on sectors that use huge amounts of gas and electricity, including:
Chemicals
Fertiliser production
Steel
Glass
Ceramics
Paper manufacturing
Many UK manufacturers have complained that they pay substantially more for energy than competitors in the US and sometimes Europe. Some plants have reduced production, delayed investment, or shifted production abroad.
For example, companies in the chemical industry have repeatedly warned that high gas prices make it difficult to compete with firms in the United States, where energy costs remain much lower.
2. Firms are investing in efficiency
Many businesses have responded by trying to use less energy rather than waiting for prices to fall.
Examples include:
Installing LED lighting
Better insulation
Heat recovery systems
More efficient machinery
On-site solar generation
Battery storage
A factory that cuts energy consumption by 20% gains a permanent advantage regardless of future energy prices.
3. Some firms are generating their own power
Increasing numbers of manufacturers are installing:
Solar panels
Wind turbines
Combined heat and power systems
Battery storage
This is particularly attractive for businesses that own large factory roofs or land.
What was once seen as an environmental measure is increasingly viewed as a business survival strategy.
4. Investment is moving elsewhere
One concern raised by business groups is that some investment is being directed to countries with lower energy costs.
The biggest beneficiary has been the United States following the shale gas revolution.
A chemical plant or data centre that might once have been built in Britain may now be built in Texas or Louisiana where energy costs can be much lower.
5. North-east Scotland feels the pressure differently
In areas such as Aberdeen and the north-east of Scotland, there is a slightly different issue.
Many workers argue that:
The UK still needs oil and gas.
Domestic production is declining.
Investment has fallen.
Skilled workers are leaving for projects overseas.
The concern is that Britain could end up importing more energy while losing some of the jobs, skills and tax revenues associated with producing it.
6. Some sectors are benefiting
Not every industry loses from high energy prices.
There has been growth in:
Renewable energy projects
Grid infrastructure
Energy efficiency services
Heat pump installation
Offshore wind supply chains
Energy management technology
The challenge is that the jobs created are not always in the same places or require the same skills as the jobs being lost.
The bigger question
What is becoming clearer is that many firms are no longer treating high energy prices as a temporary problem.
Five years ago, many companies assumed prices would eventually return to pre-2020 levels. Increasingly, businesses are planning on the basis that energy in the UK may remain relatively expensive for years.
That is affecting decisions about:
Where factories are built
Whether firms automate
Whether production is moved abroad
Which industries Britain specialises in