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UK steelmakers face electricity prices twice those of their direct competitors in France and 50% more than German steel producers, according to a report by UK Steel.
UK industrial electricity prices are the highest in the EU, according to a UK Steel report. This year the average electricity price for steel producers is around ￡65 per megaWatt hour (MWh). In Germany it is ￡43/MWh and in France it is ￡31/MWh. "With a steel site consuming in excess of half a million MWh each year, this additional cost soon adds up," the report states.
"This is the third year we have analysed the disparity between the electricity prices faced by UK steelmakers and those of their EU competitors, and the third year it has increased," said Gareth Stace, director-general of UK Steel. "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. The gap continues to widen and our steel industry is losing out," he said.
According to Stace, it''s been a year since the Government launched its Industrial Strategy and the Helm Review into the Cost of Energy and no progress has been made. "The direct impact of higher electricity costs is being felt by the steel industry at a time of high market uncertainty with the UK leaving the EU and protectionist tariffs in place in the US," he said.
Stace calls on the Government to ''step up now to tackle this critical issue''.
"Specifically, it must commit to eliminating the disparity over a given time period, track the price of energy for energy-intensive users against their international competitors, and match the exemptions and compensations given to steelmakers in France and Germany. It is high time the Government ensured the future viability of the UK steel sector," Stace concluded.
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