UK Steel calls for competitive electricity prices for industry

The wholesale price of electricity in Britain has recently exceeded its cost in France and Spain

Industry association UK Steel is calling on the next government to tackle the cost of energy for industry. This is stated in the message of the association.

As noted in the UK Steel, new data showed that the wholesale price of electricity in the UK in the last three months more than double the price in France and Spain.

The British steel industry is largely dependent on electricity, and this demand will only grow with the advent of new technology of electric arc furnaces.

It is expected that with the transition to EAF, electricity consumption in the sector will approximately double, which will make its price a priority issue.

The data shows that over the past three months, UK producers have faced an average wholesale price of almost £66/MWh compared to £27/MWh in France and £28/MWh in France and £27/MWh in Spain.

High electricity consumption can account for up to 180% of gross value added for UK steel producers, UK Steel notes.

The previous government in April of this year introduced retaliatory measures – the British Industry Supercharger – which reduced certain costs, such as taxes on renewable energy and levies on the power market, and partially – fees for using the network.

However, British steelmakers still face significantly higher wholesale prices than key competitors, and network fees are 10 times higher than in France. Higher electricity prices negatively affect the competitiveness of the industry, the ability to attract investment and the pace of decarbonization.

In order to maximize the cost of investment in new electric steelmaking plants, UK Steel noted, the British metallurgy will need an affordable supply of electricity. The next government will need to find a solution to this problem, as key competitors work with significantly lower production costs.

As GMK Center reported earlier, the Spanish steelmakers called on the government to support the industry. In particular, they note that the commitment of the local metallurgical sector to reduce emissions in the current environment is not viable.