8 October 2019
Over two years after the Conservative Party committed in its 2017 Manifesto to deliver the lowest energy costs in Europe, a new report published today by UK Steel shows UK steelmakers still face electricity prices 80% higher than those of their direct competitors in France and 61% higher than in Germany.
The Energy Price Gap: A New Power Deal for UK Steel shows that electricity prices paid by British steel producers today stand at £50 per megawatt-hour (MWh), compared to £31/MWh in Germany and just £28/MWh in France. Steel production is a highly energy intensive process with electricity costs representing up to 20% of the costs of converting the basic raw materials into steel. For some steelmakers, energy represents a bigger proportion of costs than labour.
Gareth Stace, UK Steel Director General, said:
“Our new report plainly demonstrates that UK steelmakers face systemically and persistently higher electricity prices than our competitors. Electricity is one of the biggest costs for the steel industry and it damages our competitiveness that we are consistently forced to pay significantly more. This year, the disparity has cost the steel industry £47 million, at a time where the sector is already facing wider market uncertainties and trading difficulties.
Download full press release or get the full report here