The UK's industry will not be able to
compete if it pays twice as much as the EU for electricity
The trade union of the UK’s steelmakers
appealed to the Prime Minister of the country, Rishi Sunaku,
with a request to support the domestic steel industry. ArgusMedia reports about it with the reference to
the corresponding letter.
According to the general secretary of the
community, Roy Rickhus, the British steel
industry will not be able to be competitive if it pays twice as much for
electricity as its competitors from the European Union. In addition, achieving
the industry’s decarbonisation ambitions is also impossible without a
partnership with the government.
In
2020/2021, UK steel mills paid an average of £47/MWh for electricity, compared
to £25/MWh in Germany and £28/MWh in France. Achieving price parity with
Germany would save UK factories £54m a year, which could be spent on upgrading
capacity.
Despite
the high cost of production, the British Tata Steel UK is forced to sell slabs
to Turkiye at $520/t amid low demand for coils. In fact, the company competes
with sanctioned Russian suppliers who have some of the lowest steel production
costs in the world.
As GMK Center reported earlier, according
to the head of the policy and external relations department of UK Steel, Richard
Warren, the UK government needs to keep pace with other
countries’ support for the steel industry.
According
to him, the country’s government has already introduced measures to reduce
energy costs for industry. It set the maximum amount energy suppliers can
charge for electricity and gas at £211/MWh. If this limit is exceeded, the
government intervenes and pays the difference to the consumer. Such measures
will be in effect for the next 6 months.
“At
the moment, £211/MWh for electricity is an acceptable price as it is comparable
to tariffs in other European countries, but the government needs to monitor
what EU countries do to support their industries,” said Richard Warren.