Why this matters now
Energy volatility has returned to the centre of the UK economy.
The ongoing Iran conflict has triggered one of the most significant global energy disruptions in decades. Around 20% of global oil supply has been impacted, with prices rising sharply and volatility spreading across gas and electricity markets.
For UK manufacturers, the impact is immediate.
Rising input costs, reduced confidence, and increasing pressure on margins are already being felt across the sector.
In response, the government has stepped in.
Rachel Reeves’ support for UK manufacturers
Chancellor Rachel Reeves has announced expanded support for energy-intensive businesses through the British Industrial Competitiveness Scheme (BICS).
- Support extended to over 10,000 manufacturers
- Exemptions from key electricity levies
- Potential energy bill reductions of up to 25%
- Estimated £600 million annual support package
This is a clear signal.
Government recognises that energy costs are now a critical threat to UK industrial competitiveness.
But there is an important limitation.
Support helps, but it does not solve the problem
The current support package is designed to relieve pressure.
It is not designed to eliminate volatility.
The UK remains heavily exposed to global energy markets. When supply chains are disrupted, domestic prices rise. Even increased North Sea production is unlikely to materially reduce costs in the short term, as energy is still traded globally.
This creates a structural issue.
Manufacturers are being supported through the crisis, but they are still operating within the same volatile system.
The deeper issue: UK manufacturing is behind Europe
Compared to European counterparts, UK manufacturers are still relatively early in adopting renewable energy solutions at scale.
In countries like Germany and the Netherlands, industrial energy strategies have already shifted towards:
- On-site solar generation
- Battery storage integration
- Long-term energy cost planning
In the UK, many businesses still rely heavily on grid electricity and short-term procurement strategies.
This creates a growing gap.
As volatility increases, so does the competitive advantage of businesses with stable, controlled energy costs.
Energy volatility vs energy control
The current environment highlights a clear divide.
Businesses exposed to volatility:
- Face unpredictable cost increases
- Struggle with long-term planning
- Are forced into reactive decision-making
Businesses investing in energy resilience:
- Reduce reliance on the grid
- Stabilise energy costs over time
- Gain stronger financial visibility
This is not theoretical.
The International Energy Agency has described the current situation as one of the greatest global energy security challenges in history, reinforcing the need for more resilient energy systems.
Why renewable energy is now a commercial decision
Renewable energy is often framed as a sustainability initiative.
In 2026, it is a commercial one.
Solar and battery storage offer:
- Reduced exposure to wholesale energy prices
- Greater control over energy usage and cost
- Long-term protection against volatility
- Improved operational resilience
In a volatile market, control becomes valuable.
And increasingly, it becomes necessary.
What manufacturers should be doing now
From a strategic standpoint, there are clear steps businesses can take.
1. Assess energy risk exposure
Understand how much of your cost base is tied to volatile pricing.
2. Explore on-site generation
Solar PV can significantly reduce reliance on grid electricity.
3. Consider battery storage
Battery systems allow businesses to:
- Store cheaper energy
- Avoid peak pricing
- Improve overall efficiency
4. Take a longer-term view
Short-term support schemes help, but long-term stability comes from structural change.
All in all it is positive …
Government support is a positive step.
But it is not a long-term solution to energy volatility.
The businesses that will come out strongest from this period are not just those that receive support. They are the ones that reduce their dependence on the system creating the volatility in the first place.
This is where strategy matters.
Speak to Olympus Power
At Olympus Power, we work with manufacturers to move from reactive energy spending to structured, resilient energy strategies.
If you want to understand how renewable energy could reduce your costs and protect your business from ongoing volatility, we can help you assess what is viable and commercially effective. A short conversation can help you move from uncertainty to clarity. Speak to our team today!