Cutting energy prices won’t fix the UK’s manufacturing’s cost crisis.

Recent warnings from Energy UK and the CBI underline just how acute energy costs have become for British manufacturers. Their joint report, Cutting Business Energy Costs: The Case for Action, makes clear that persistently high energy prices are eroding competitiveness, delaying investment and putting the UK’s manufacturing base under real strain.

This intervention is timely and necessary. UK industrial energy prices remain among the highest in the developed world, and the impact on margins, confidence and long-term planning is undeniable. But if the response to these warnings focuses too narrowly on cutting prices, we risk missing the deeper challenge facing manufacturers, and with it, a significant opportunity.

Energy costs are no longer driven simply by the unit price of power. While wholesale prices surged in the aftermath of Russia’s invasion of Ukraine, today’s pressures increasingly come from structural elements such as network charges, peak demand costs and system balancing. Even if wholesale prices continue to ease, many manufacturers will remain exposed because the way energy costs are structured and recovered is changing.

This complexity is at the heart of the problem. For years, the energy trilemma of affordability, security and sustainability was treated as a government or policy-level construct, debated in Whitehall rather than on factory floors. But this reality has changed.

Today, the energy trilemma is felt directly at organisational level. Affordability shows up in volatile and rising bills. Security is experienced through grid constraints, connection delays and supply risk. Sustainability is driven by regulation, investor scrutiny and customer expectations. These are no longer abstract trade-offs; they are operational realities shaping day-to-day decisions across UK manufacturing.

Yet much of the public debate still treats affordability as the dominant concern, implicitly assuming security and sustainability can be addressed separately, or later. In practice, the three are now inseparable. Decisions taken to manage cost affect resilience, while choices around flexibility and security influence long-term sustainability. Focusing on one in isolation increasingly undermines the others.

This is why price-based interventions alone cannot deliver lasting relief. Without understanding how their own operations interact with the energy system, manufacturers remain exposed to volatility, rising structural costs and future constraint, regardless of any positive impacts of short-term price support.

The challenge, and the opportunity, is for manufacturers to apply the energy trilemma strategically within their own businesses. That means developing a clearer understanding of how energy is used, when demand peaks occur, and how operations connect to an increasingly constrained grid. It also means recognising that becoming future grid ready is not a technical ambition but a strategic one, with implications for cost control, resilience and long-term competitiveness.

Policy support has an important role to play, and recent measures aimed at reducing costs for energy-intensive industries are welcome. But thousands of mid-sized manufacturers remain exposed, and for them, resilience will not come from price relief alone. It will come from better visibility, better data and better integrated decision-making around energy.

The CBI and Energy UK are right to sound the alarm. High energy costs are a serious threat to the UK’s manufacturing future. But the response must go further than cutting prices. It must recognise the complexity of the energy system manufacturers now operate within and support businesses to balance the trilemma – affordability, security and sustainability – in a way that reflects their own, unique operational models.

Energy strategy, not just energy price, will increasingly determine which manufacturers are able to invest, adapt and compete in the years ahead.

By Maureen Bray, Managing Director at Equity Energies