What counts as high-volume energy use for a manufacturer?

There’s no single figure that applies to every business, but once your usage reaches the level where you’re required to have a half-hourly meter, you’re firmly in high-volume territory. Our half-hourly meter guide explains where those thresholds sit.

What’s the biggest cost driver in manufacturing energy procurement?

The wholesale unit rate is usually the smallest lever. Network charges, policy costs and how well your contract matches your actual load shape typically make a bigger difference to your final bill.

Should a manufacturer choose a fixed, flexible or hybrid energy contract?

It depends on how much risk you’re comfortable carrying and how actively you or your team can manage the position. Fixed gives you certainty. Flexible can reduce costs over time but needs closer attention. A hybrid approach, fixing a core portion of usage and leaving the rest flexible, is worth considering if your baseload is stable but your peaks vary. Neither is automatically right, so it’s worth weighing up against your own circumstances rather than defaulting to whichever you’ve always used.

Do manufacturers need a half-hourly meter?

Many do. Electricity-intensive sites like manufacturing and food processing are often required to have one once usage passes certain thresholds, under rules known as P272. Our half-hourly meter guide explains this in full.

Does MHHS affect manufacturers who already have half-hourly meters?

Yes. The meter itself doesn’t change, but the settlement system behind it does, which affects how suppliers price contracts and how quickly billing corrections are reconciled.

Can smaller manufacturing sites take part in demand flexibility schemes?

Since April 2026, yes. NESO lowered the eligibility threshold for the Demand Flexibility Service from 1MW to 0.1MW, bringing many more sites into scope.

How does an energy tender work across multiple manufacturing sites?

Rather than negotiating meter by meter, a tender, or RFP, brings your sites together into a single process, so suppliers quote against the same requirements and you can compare properly. Our energy RFP guide walks through how to structure one.

What happens if our contract ends before a new one is agreed?

You’ll usually default to a deemed rate, which tends to cost significantly more than an agreed contract. It’s worth building your renewal date into your planning well ahead of the expiry date, rather than reacting once you’re already on it.

Energy Procurement for Manufacturing: Managing High-Volume Demand

Manufacturing sites don't use energy like most other businesses. Production lines run for hours at a stretch, machinery starts up in bursts, and usage rarely sits still. That makes procurement a different exercise too. Getting it right means looking past the headline unit rate and understanding how you buy, not just who from.

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Why manufacturing energy costs behave differently

Industrial electricity prices have actually eased over the past year. The UK Government's Quarterly Energy Prices publication (March 2026) shows average electricity prices for manufacturing consumers fell by 7.9% between Q4 2024 and Q4 2025, to 16.8p/kWh (excluding the Climate Change Levy), with gas down 11.6% to 3.5p/kWh over the same period.

That's a helpful backdrop, but it's only part of the picture for a high-volume site. Network charges sit alongside the wholesale price, and they're moving the other way. From April 2026, NESO confirmed TNUoS (Transmission Network Use of System) charges are rising by more than 60%, from £18.9/MWh to £31/MWh. We've covered how these network costs feed into your bill, including the closely related peak demand charge, in our guide to peak demand charges. If your load is concentrated around certain hours, that's worth understanding before you time your next contract.

Building an energy procurement strategy: fixed, flexible or hybrid

There's no single right answer here. It depends on your risk appetite, your load profile and how predictable your production schedule is.

Fixed contracts lock in a unit rate for the whole term. They're straightforward to budget against, and they suit sites with steady, predictable consumption. The trade-off is that you're committed to that rate even if wholesale prices fall.
Flexible contracts let you buy energy in stages ahead of delivery, building a position over time rather than locking in a single rate on one day. This suits sites with variable or seasonal usage, or those with the resource to actively manage the position.
Hybrid approaches split the difference: fixing a core portion of expected usage while leaving some volume open to flexible purchasing. For manufacturers with a stable baseload but variable peak demand, this often gives the best balance of certainty and flexibility.

The starting point for any of these is your actual load profile, not your annual total. A site running three shifts looks very different to one that peaks for four hours a day, even at identical total consumption. If you'd rather have this built out for you, our energy procurement team runs this as a tendering process, similar to the approach in our energy RFP guide, putting your requirements to a panel of suppliers who compete for your business.

Managing demand, not just volume

Two manufacturers using the same amount of energy over a month can end up with very different bills, because of when that energy is drawn rather than how much of it there is. Several machines starting at once creates a spike in demand that a bill measures separately from your day-to-day usage.

A few things are worth checking before you renew:

Whether your agreed capacity with your network operator still matches how your site actually operates, particularly after adding equipment or changing shift patterns
Whether start-up times for major equipment could be staggered rather than run simultaneously
Whether your supplier can give you your half-hourly data, so any changes are based on your actual usage pattern rather than guesswork

We go into the mechanics of this in more detail, including what drives the charge and how to reduce it, in our guide to peak demand charges.

What MHHS means for your next contract

Most manufacturing sites already have half-hourly meters, so this isn't new territory in terms of measurement — our half-hourly meter guide covers who needs one and why. What's changing is the settlement system underneath it, through Market-wide Half-Hourly Settlement, or MHHS.

Elexon's rollout is targeting around 80% of meter points migrated by October 2026, working towards full cutover to the new settlement timetable in mid-2027.

The practical effect for high-volume users is twofold. Suppliers will increasingly price contracts against your real load shape rather than a standard profile, which can work in your favour if you're flexible, and against you if your usage is peak-heavy. And settlement timescales are shortening, which should reduce the cash flow uncertainty that comes with delayed billing corrections.

Turning high volume into an advantage

High, predictable demand isn't only a cost to manage; it can be a lever. Sites with flexible operations can register with NESO's Demand Flexibility Service, or work through their supplier or an aggregator, to get paid for shifting energy-intensive processes away from peak demand periods. NESO lowered the threshold for participation from 1MW to 0.1MW in April 2026, opening this up to a broader range of manufacturing sites than before.

Even without formal participation in these schemes, scheduling energy-intensive processes for off-peak hours where production allows can reduce exposure to the highest-cost periods on your bill.

Procuring across multiple sites and meters

Many manufacturers aren't running a single site. Production, warehousing and office space often sit under separate meters, sometimes with contract end dates that have drifted apart over time.

Handled meter by meter, that becomes a lot of separate renewal dates to track and a lot of separate negotiations. Handled as a single procurement exercise, whether that's a formal tender or a structured request for proposal, it becomes one process covering everything you need, and one point of comparison across suppliers. Our guide to running an energy RFP covers how to put one together.

Timing your renewal

Letting a contract lapse without a replacement is one of the most expensive mistakes a high-usage site can make. Without a live contract, you can default to a deemed rate, which is typically far more expensive than anything you'd agree to in advance.

For a manufacturer, that risk is worth taking seriously, because the amounts involved are larger than for a typical small business. Building your renewal date into your production or budget planning, rather than treating it as an admin task to get to eventually, is the simplest way to avoid it.

Support on the horizon

The Government's British Industrial Competitiveness Scheme (BICS) exempts eligible manufacturers from certain policy costs, specifically the indirect costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market, rather than cutting network charges directly. It targets manufacturers in the Industrial Strategy's priority growth sectors (advanced manufacturing, clean energy technologies, digital, defence and life sciences) and the foundational industries that supply them, such as metals, chemicals, glass and ceramics, with eligibility set by SIC and product codes.

The scheme has been expanded to cover over 10,000 manufacturing businesses. Savings are expected from April 2027 for most of the relief, with the Capacity Market element following in October 2027. It's not live support yet, and legislation is still required, but it's worth tracking if your site falls into one of the eligible sectors.

Getting your procurement strategy right

The unit rate is the easiest number to compare and the least useful one on its own. A manufacturing site's true energy cost is the wholesale price, the network and policy charges layered on top, the shape of your demand, and how well your contract structure matches it. Getting those reviewed together, ideally before your current contract is close to renewal, puts you in a much stronger position than comparing deals on price alone.

If you'd rather have someone build a procurement approach around your site's actual demand, compare business electricity deals or get a tailored energy procurement quote with Love Energy Savings.

Manufacturing energy procurement: FAQs

What counts as high-volume energy use for a manufacturer?

There's no single figure that applies to every business, but once your usage reaches the level where you're required to have a half-hourly meter, you're firmly in high-volume territory. Our half-hourly meter guide explains where those thresholds sit.
What's the biggest cost driver in manufacturing energy procurement?

The wholesale unit rate is usually the smallest lever. Network charges, policy costs and how well your contract matches your actual load shape typically make a bigger difference to your final bill.
Should a manufacturer choose a fixed, flexible or hybrid energy contract?

It depends on how much risk you're comfortable carrying and how actively you or your team can manage the position. Fixed gives you certainty. Flexible can reduce costs over time but needs closer attention. A hybrid approach, fixing a core portion of usage and leaving the rest flexible, is worth considering if your baseload is stable but your peaks vary. Neither is automatically right, so it's worth weighing up against your own circumstances rather than defaulting to whichever you've always used.
Do manufacturers need a half-hourly meter?

Many do. Electricity-intensive sites like manufacturing and food processing are often required to have one once usage passes certain thresholds, under rules known as P272. Our half-hourly meter guide explains this in full.
Does MHHS affect manufacturers who already have half-hourly meters?

Yes. The meter itself doesn't change, but the settlement system behind it does, which affects how suppliers price contracts and how quickly billing corrections are reconciled.
Can smaller manufacturing sites take part in demand flexibility schemes?

Since April 2026, yes. NESO lowered the eligibility threshold for the Demand Flexibility Service from 1MW to 0.1MW, bringing many more sites into scope.
How does an energy tender work across multiple manufacturing sites?

Rather than negotiating meter by meter, a tender, or RFP, brings your sites together into a single process, so suppliers quote against the same requirements and you can compare properly. Our energy RFP guide walks through how to structure one.
What happens if our contract ends before a new one is agreed?

You'll usually default to a deemed rate, which tends to cost significantly more than an agreed contract. It's worth building your renewal date into your planning well ahead of the expiry date, rather than reacting once you're already on it.