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.
This is the fourth year UK Steel has conducted this research and despite significant drops in the wholesale cost, the price difference still persists. The disparity with German power prices will cost the sector £47 million this year; UK steel companies have committed to reinvest all of this back into production facilities should Government take action to level the playing field.