UK’s Steel Industry Urges Government to Block Energy Price Rise
The Mirror reported that UK’s All Party Parliamentary Group on Steel and Metal Related Industries Chairman British Member of Parliament Mr Stephen Kinnock, fearing UK’s energy watchdog Ofgem allowing a hike in power prices, has called on UK’s Business Secretary Mr Kwasi Kwarteng to intervene to prevent a crippling rise in electricity costs for the steel industry. Mr Kinnock wrote “Shockingly, Ofgem is proposing to implement the worst possible outcome for the steel sector, which would double network charges. Despite extensive and in-depth representation made to the energy regulator on the impact of this reform on the sector, its competitiveness, and ability to decarbonise, Ofgem still chose to propose a significant charge increase. When the sector faces increasing calls to decarbonise, it is astonishing that the regulator would choose to make this even harder and considerably damage the competitive business environment for energy intensive industries.”
UK Steel Director General Mr Gareth Stace said “The continued disparity between the electricity prices paid by UK steelmakers and our European competitors is huge, and a massive disincentive to investment in the UK. Every year, GBP 50 million extra is spent on electricity costs that could otherwise be productively invested. The cost for the decarbonisation of the steel sector will run into the billions, and failing to remove these barriers to investment only makes the route to decarbonisation harder. Ofgem themselves have acknowledged that UK steel producers are charged far more than those in other nations. “Recognising this is not enough, words are not enough. Only actions matter, and we urge the government to remove this millstone from the neck of our sector.”
Community steelworkers' union operations director Mr Alasdair McDiarmid said “Our steel industry has to decarbonise, but all the options require more electricity and we need urgent action to bring down the UK’s sky-high prices. Currently we pay twice as much for electricity as our EU competitors, which are a major competitive disadvantage as well as a barrier to delivering the Government’s climate objectives.”
A Business Department spokesman said “We remain committed to supporting UK steelmaking to make the industry more energy efficient, cutting their bills in the process. This includes our Decarbonisation Strategy to support industry to cut emissions, as well as hundreds of millions of pounds in support to the industry, both through dedicated funds and through relief from higher energy bills.”
An industry study, The Energy Price Scandal: A Fair Power Deal for UK Steel, showed the average electricity price for steel producers in the UK is about GBP 65 per megawatt hour, compared with GBP 31 per MWh in France and GBP 43 per MWh in Germany.