British Steel supports call to reduce electricity prices in the UK

British Steel has supported the call for lower electricity prices in the UK. This is stated in a message on the company’s website.

The steelmaker cites a recent report by the UK Steel industry association on industrial electricity prices, which says there is a significant gap between the cost of electricity for British steelmakers and their European competitors.

According to UK Steel, British steelmakers pay 50% more than their competitors in France and Germany, which adds £37 million to the cost of electricity for the country’s steelmakers. The price disparity is mainly due to higher wholesale prices in the UK and partly to higher network costs.

UK Steel makes three recommendations to reduce prices:

• compensate the industry for 90% of network costs, which is in line with the level of support in France and Germany;
• reform the wholesale market and use discount models for local pricing;
• monitor the disparity in industrial energy prices between countries.

According to Gareth Stace, CEO of UK Steel, the new government has already declared its readiness to support the steel industry. It now has the opportunity to bring industrial electricity prices in line with those of competitors of British steelmakers.

“The average price faced by UK steelmakers in 2024/2025 is £66/MWh, compared to the French price of £43/MWh and the German price of £50/MWh. That’s a price gap of up to £22/MWh, which means we will pay £37-50 million more for electricity this year than our European competitors,” Stace said.

As the steel industry strives to electrify by investing in new additional electric arc furnaces, electricity prices are becoming even more important to the competitiveness, profitability and future success of the industry.

Electricity costs are one of the biggest barriers to sustainable steel production in the UK. As the steel industry switches to electric arc furnaces, electricity consumption in the sector is expected to roughly double.

According to Allan Bell, British Steel’s Director of Commercial and Procurement, the new government is well aware of the challenges the company faces, including high electricity prices. The steelmaker is looking forward to working together to build a clean, green and sustainable future.

In June, the Italian steelmakers’ association Federacciai called for support for the country’s electric steel sector in addressing a number of issues. In particular, it was about the cost of energy, which is much higher in Italy than in other European industrial countries.