UK Steel has published a report on industrial electricity prices, revealing a significant gap between what UK steelmakers and their European counterparts pay. The report outlines three recommendations to align UK electricity prices with those in Europe, emphasizing the importance of competitive electricity costs as the steel industry moves towards electrification with new electric arc furnaces.
The report highlights that UK steel producers pay up to 50pct more for electricity than competitors in France and Germany, adding an estimated GBP 37 mln (USD 48.5 mln) to UK steel production costs. This price disparity is primarily due to higher wholesale costs in the UK and partly to greater network charges.
UK Steel recommends compensating the industry for 90pct of network charges, matching French and German support levels, undertaking wholesale market reforms, and tracking industrial energy price disparities between countries.
UK Steel Director General Gareth Stace stated, “The new Government has shown willingness to support the steel industry, and now has the opportunity to align industrial electricity prices with our competitors. High electricity prices have long burdened the UK steel industry, impacting competitiveness, profitability, and future investment.”
For 2024/25, UK steelmakers face an average electricity price of GBP 66 (USD 86.6) per MWh, compared to GBP 43 (USD 56.4) in France and GBP 50 (USD 65.6) in Germany, resulting in a price gap of up to GBP 22 (USD 28.8) per MWh. This discrepancy translates to UK steelmakers paying an additional GBP 37-50 mln (USD 48.5-65.6 mln) for electricity compared to their European peers.
1 USD / 0.76 GBP
