UK power prices sit 45% above G7 average, CBI and Energy UK warn

The CBI and Energy UK have published a joint report pressing the government to remove several policy levies from non-domestic electricity bills. The headline claim is stark: UK electricity prices sit 45% above the G7 average, and the two bodies say 40% of companies are pulling back on investment as a direct result. Reuters reported the call, framing it as a growth measure for the new administration.

The mechanism is specific. The report proposes scrapping the Renewables Obligation (RO) and Feed-in Tariff (FiT) costs that businesses currently carry through their bills, alongside removing the Climate Change Levy (CCL) from non-domestic electricity. Funding would shift to general taxation or a new Energy Transition Funding Scheme, publicly or privately financed. Louise Hellem, the CBI's chief economist, argued that stronger growth is hard to reach while firms carry outsized energy costs.

What this means for UK buyers

None of this is live policy yet. It is a lobbying position aimed at an incoming government, so your current contracts and pass-through charges are unchanged. But if adopted, the reforms would reshape the non-commodity portion of your bill, which for many sites now rivals the wholesale element itself.

UK baseload day-ahead power over the last year shows the wholesale backdrop against which the 45% G7 gap and the levy debate should be read.

The specific levers on the table:

• Renewables Obligation (RO) costs removed from business bills
• Feed-in Tariff (FiT) costs removed from business bills
• Climate Change Levy (CCL) removed from non-domestic electricity
• Funding moved to general taxation or an Energy Transition Funding Scheme
• A combined bill reduction of up to 20%

For buyers, the sensitivity depends on contract type. Fully fixed and pass-through contracts treat these charges differently, so a change to policy costs would land unevenly across your portfolio. Energy-intensive sites, where non-commodity charges make up a larger share of the unit rate, would see the sharpest effect.

Context matters on the numbers. The government has previously acted on industrial power costs: a gov.uk announcement set out cuts to electricity costs for UK industry, so there is precedent for intervention on this exact charge base. Separately, the Trades Union Congress has pushed for higher taxes on bank profits to fund household bill reductions, a reminder that the funding question, not just the principle, is contested. The BBC noted the political fault line over who ultimately pays for energy relief.

Watch for whether the incoming administration signals support in its first fiscal statement. Until a levy change is confirmed and dated, treat your renewal calendar on current charges, and model the 20% figure only as an upside scenario rather than a base case.