UK steel industry’s trade association UK Steel in a report warned that UK steel makers' attempts to cut carbon emissions are being crippled by sky-high electricity prices. UK Steel report “‘A barrier to decarbonisation: Industrial electricity prices faced by UK steelmakers’, shows how British firms face higher costs than foreign rivals, which can then sell their steel more cheaply. The report says “Whilst gas and electricity prices rose over the past eight months across Europe, due to increased gas demand in Asia and lower supply from Russia, the increase is considerably higher here in the UK. Soaring power costs are hampering plans to move towards cleaner production because greener methods need even more electricity.”As per report “The average UK electricity prices steel companies paid in September and October reached GBP 182 per MWh, almost double compared to estimated German averages at GBP 94 per MWh. The UK’s disproportionately high electricity prices have cost UK steelmakers an extra GBP 90million this year and GBP 345million over the last six years, equivalent of almost two years capital investment in the sector.”UK Steel warned “The price disparity is a major barrier to meeting the net-zero target, since all options for decarbonising steel production from carbon capture and storage, to hydrogen, to electric arc production lead to significantly increased electricity consumption.”Power costs make up about 20% of the manufacturing costs of steel. Switching from blast furnaces to hydrogen-based steelmaking could involve using 250% more electricity. A complete shift to electric arc furnace production would increase consumption by 150%.Among other recommendations, the UK steel report said the British government should implement power network cost reductions similar to those in Germany and France in order to help the industry reduce its CO2 impact.
UK steel industry’s trade association UK Steel in a report warned that UK steel makers' attempts to cut carbon emissions are being crippled by sky-high electricity prices. UK Steel report “‘A barrier to decarbonisation: Industrial electricity prices faced by UK steelmakers’, shows how British firms face higher costs than foreign rivals, which can then sell their steel more cheaply. The report says “Whilst gas and electricity prices rose over the past eight months across Europe, due to increased gas demand in Asia and lower supply from Russia, the increase is considerably higher here in the UK. Soaring power costs are hampering plans to move towards cleaner production because greener methods need even more electricity.”As per report “The average UK electricity prices steel companies paid in September and October reached GBP 182 per MWh, almost double compared to estimated German averages at GBP 94 per MWh. The UK’s disproportionately high electricity prices have cost UK steelmakers an extra GBP 90million this year and GBP 345million over the last six years, equivalent of almost two years capital investment in the sector.”UK Steel warned “The price disparity is a major barrier to meeting the net-zero target, since all options for decarbonising steel production from carbon capture and storage, to hydrogen, to electric arc production lead to significantly increased electricity consumption.”Power costs make up about 20% of the manufacturing costs of steel. Switching from blast furnaces to hydrogen-based steelmaking could involve using 250% more electricity. A complete shift to electric arc furnace production would increase consumption by 150%.Among other recommendations, the UK steel report said the British government should implement power network cost reductions similar to those in Germany and France in order to help the industry reduce its CO2 impact.
