UK-based trade association UK Steel has stated that it welcomes the UK government’s newly unveiled modern Industrial Strategy to deliver competitive industrial electricity prices and boost the UK steel industry’s competitiveness, adopting three key UK Steel recommendations.
The three key recommendations are raising Network Charging Compensation to 90 percent from 60 percent, saving UK steelmakers £14.5 million annually and matching what is provided in Germany and France; retaining indirect carbon cost compensation, which compensates the steel industry for the carbon taxes paid via electricity bills; plans for a British Industrial Competitiveness Scheme from 2027, which is expected to cut power prices by up to £43/MWh for eligible manufacturers.
Despite this impactful cut to electricity costs, there remains a £10-16 per MWh difference between European electricity costs, which slaps £36 million per year on steel bills in the UK. UK Steel stated that the reason for the disparity is wholesale electricity costs, driven by the UK’s reliance on natural gas power generation.