UK Metals Says Electricity Prices Are A Barrier To Decarbonization

Electricity prices are stopping UK steel production from decarbonising.

A new report from trade association UK Steel says current electricity prices are a hindrance to decarbonisation strategies.

The analysis shows that steel producers in the UK have to pay almost 61% more for electricity than their counterparts in Germany and almost 51% more than in France.

The authors of the report estimate that electricity prices have risen from an average of £ 20 per MWh between 2015 and 2020 to £ 34 per MWh this year.

British steelworkers will spend an additional £ 90 million this year, with a total cost of £ 345 million over six years, the equivalent of nearly two years of capital investment in the sector, the trade association said.

Gareth Stays, CEO of UK Steel, said: “The UK steel sector is a major consumer of electricity, consuming as much electricity annually as 800,000 homes.

“We also trade very intensively as we import 70% of the required steel and export 45% of everything we produce.

The disproportionately high electricity prices in the UK have a huge negative impact on the sector's ability to compete, trade, attract domestic investment and ultimately be sustainable over the long term. ”