The UK government has formally abandoned the Green Power Pools policy proposal, which has been adopted in France, Italy and Greece, aimed at delivering competitive electricity prices for the steel industry, and has confirmed that it will only proceed with a locational marginal pricing model. Expressing disappointment that the government has dropped the proposal, UK-based trade association UK Steel stated that the government is missing a golden opportunity to ensure that electrified, green steelmaking can thrive in the UK.
Over the past decade, the UK steel sector has suffered prices between 60-80 percent higher than in Germany and France. With a further switch to electric arc furnaces, it is expected that the sector’s electricity consumption will roughly double. “As the steel industry switches to electric furnaces to reach vital net zero targets, we must not lose sight of how important electricity costs are in the move to green steel. We paid £117 million more for our electricity in 2023 than our European competitors,” Frank Aaskov, energy and climate change policy manager at UK Steel, said.