How much energy does a factory use? UK figures and costs

The official figures for factories

The government's main source on energy use in business buildings is the Non-domestic National Energy Efficiency Data-Framework (ND-NEED), published by the Department for Energy Security and Net Zero (DESNZ). It's built from metered grid electricity and mains gas data for buildings in England and Wales.

ND-NEED's "Factories" group covers buildings with the Valuation Office's factory description codes (those beginning "IF"), which include workshops. Warehouses are a separate group. At the end of March 2026 there were 243,000 factory buildings, 14% of all non-domestic buildings but 23% of their floor area.

These are the ND-NEED 2026 figures for factories, for energy used in 2024:

The gas medians are for factory buildings with mains gas.

Factories use more energy in total than any other named building use. Per square metre, though, the median factory uses relatively little: only warehouses have a lower median use of electricity or gas per square metre. Our guide to business energy use compares the figures for each of its ten building uses.

Why the typical factory figure can mislead

Factory energy use is more concentrated in a few buildings than in any other building use. According to ND-NEED:

• Electricity. 80% of all factory electricity is used by the highest-consuming 2% of factory buildings.
• Gas. 80% of all factory gas is used by the highest-consuming 1%.

So the median says little about a large site: a few very large sites use most of the energy. DESNZ says factories' high total use of electricity and gas is driven partly by their large size and partly by processes with high electricity and gas demands.

How much energy UK industry uses

The government's wider statistics cover the whole of UK industry, classed by type of business rather than by building, so they aren't directly comparable with ND-NEED.

• Total use. UK industry used 17.3 million tonnes of oil equivalent in 2025, about 201 TWh. That's 4.9% less than in 2024 and the lowest in the series. It's now 27% of the peak in 1973.
• Electricity. Industry used 76.7 TWh of electricity in 2025, the lowest since 1983, and 23.7% of total UK electricity demand.
• Fuel mix. Electricity made up about 38% of industry's energy in 2025 and gas about 32%, with the rest from bioenergy and heat, oil, and coal and manufactured fuels.

What uses the most energy in a factory?

DESNZ's estimates for 2025 show where industry's energy goes:

• Heat. About 50% of industrial energy was used to produce heat, for processes and other heating, and 39% of that heat was very high temperature heat, above 500°C. ND-NEED, citing ECUK's earlier end-use tables, says industrial processes (including motors and compressed air) account for about 73% of gas use in industry.
• Motors and machinery. Mechanical energy, such as motors driving machinery, made up 19% of industrial energy.
• Lighting. The government's Building Energy Efficiency Survey (BEES), from 2014-15, which left out industrial processes, found lighting was an especially large part of the remaining energy use in industrial premises, mainly because of long operating hours. Double or 24-hour shift patterns were common.
• Compressed air. DESNZ no longer reports compressed air as a separate use. The most recent figure we've found is the Carbon Trust's estimate, from 2012, that compressed air accounted for around 10% of UK industry's electricity.

These estimates exclude construction and unclassified industrial use. Since the 2026 edition, DESNZ bases them on research from Spain, applied to data from 2021 onwards, replacing a method last updated in 2014.

Is there a benchmark for factories?

Not a single useful one. Manufacturing processes vary so much that a figure per square metre tells you little about whether a site is efficient.

• ND-NEED's medians (27 kWh of electricity and 70 kWh of gas per m²) include process energy, but cover every kind of factory and workshop together.
• The CIBSE benchmarks used for Display Energy Certificates (TM46, from 2008) are building benchmarks. They have a single "Workshop" category, for a workshop or open working area, and no category for factories or industrial processes.
• BEES left industrial processes out of its scope altogether.

For most manufacturers, the more useful measure is energy per unit of output: kWh per tonne, per item or per batch, tracked over time. Climate Change Agreement targets also take account of how much a site produces.

What manufacturers pay for energy

DESNZ publishes a price series for manufacturing industry alone, covering Great Britain and excluding the Climate Change Levy. For April to June 2026, the provisional averages were:

These are averages across all manufacturers, large and small. Larger users usually pay less per kWh than small ones, so a small manufacturer's prices may be well above them. Our business energy prices page shows the government's figures for all non-domestic users by size, for business electricity and gas.

How UK prices compare internationally: the Office for National Statistics reported that in 2023, UK industrial electricity prices were 46% above the median for the International Energy Agency's member countries, while UK industrial gas prices were 7% below it.

Schemes that lower energy costs for manufacturers

Several government schemes reduce energy costs for eligible manufacturers. Most are for energy-intensive businesses, and each has its own tests.

Climate Change Agreements. A site in a Climate Change Agreement gets a 92% discount on the Climate Change Levy for electricity, 89% for gas and 77% for LPG, in return for meeting energy efficiency or carbon saving targets set under its sector's agreement. At least 70% of the energy supplied to the facility covered by the agreement must be for the eligible process, and if the process uses less than 70% of a site's energy, it has to be permanently sub-metered. New sites can apply between 1 January and 31 August each year from 2026 to 2029. See our guide to the Climate Change Levy.

The energy-intensive industries exemption. Businesses with an energy-intensive industries certificate are exempt from the indirect costs of Contracts for Difference, the Renewables Obligation, small-scale Feed-in Tariffs and the Capacity Market. The exemption rose from 85% to 100% in April 2024. To qualify, a business must make a product in an eligible sector, and its electricity costs must be at least 20% of its gross value added. The exemption only covers the electricity used to make the eligible product.

Network charging compensation. Since 1 April 2026, certificate holders can claim compensation for 90% of the eligible part of their network charges, up from 60%. Elexon runs the scheme, and claims are made each quarter for charges already paid. Elexon publishes the claim window for each quarter.

The British Industrial Competitiveness Scheme. The government says this new scheme will reduce electricity costs for eligible manufacturers by up to £40 per MWh from 2027, by exempting them from the indirect costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market. The first application window runs from 1 October to 11:59pm on 30 November 2026. To qualify, a business must be registered on Companies House, operate in an eligible sector and make eligible products in Great Britain, and each site it claims for must use at least 33 MWh of grid electricity a year. Businesses supported by the British Industry Supercharger, which includes the energy-intensive industries exemption and network charging compensation, can also apply, but can't get relief for the same activity under both schemes.

Indirect carbon cost compensation. A separate scheme compensates eligible electricity-intensive manufacturers for part of the indirect costs of the UK Emissions Trading Scheme and Carbon Price Support that are built into their electricity prices. A business must make a product in a listed sector, and its indirect carbon costs must be at least 5% of its gross value added.

Rules for larger manufacturers

The Energy Savings Opportunity Scheme (ESOS) applies to large UK businesses, meaning those with 250 or more employees, or with an annual turnover over £44 million and a balance sheet over £38 million, and to their corporate group if any UK member of the group qualifies. For the current phase, phase 4, a business qualifies if it meets the test on 31 December 2026, and the deadline to comply is 5 December 2027. An ESOS assessment covers energy used in buildings, industrial processes and transport.

How to compare your own factory's energy use

1. Gather 12 months of bills for every fuel you use, including oil or LPG, and note the kWh for each.
2. Work out your energy per unit of output for each month, such as kWh per tonne or per item, and track it over time.
3. Compare per square metre with care. ND-NEED's medians are a rough guide only, because they mix every kind of factory and cover only grid electricity and mains gas.
4. Use half-hourly data. Most larger sites have half-hourly meters, which show when you use electricity, what runs when the site is closed, and your highest demand. See our guide to half-hourly meters.
5. Meter big uses separately where you can, such as furnaces, ovens, compressors and chillers, so you can see which one is changing.
6. Check your use between shifts. Energy used when nothing is being made shows what's left running.

What to check on your factory's energy bills

• Your agreed capacity. Larger sites pay a daily charge for each kVA of their agreed supply capacity, and an extra charge if they go over it. Our guide to kVA capacity charges explains how to check yours.
• Network charges. Distribution and transmission charges are a big part of a large site's bill. Our guides to DUoS charges and TNUoS charges explain them.
• The Climate Change Levy. If your site is in a Climate Change Agreement, check each bill shows the reduced rate.
• Your contract end date. If your contract has ended and you haven't agreed a new one, you may be paying out-of-contract rates. Our guide to business energy contracts explains the terms that decide what you pay.
• The usage figures your contract is based on. If you've added machinery, shifts or a new line, they may be out of date.