British steel companies are now paying 62% more for electricity than German firms and 80% more than French firms, according to the 26-page report Energy Price Gaps - New Challenges for UK Steel.
UK energy-intensive industries are facing some of the highest industrial electricity prices in Europe. This is detrimental to the competitiveness of the metallurgical sector as it is electricity intensive and highly prone to international competition, which means it cannot pass the additional costs onto customers.
Because this affects the direct competitiveness of steel producers and the level of investment, electricity prices have become a major concern for the sector and its long-term sustainability, ”the document says.
UK steel companies pay £ 50 /MWh, up from £ 31 /MWh in Germany and just £ 28 /MWh in France.
A typical steel mill can use over half a million MWh per year.
For some steel companies, electricity represents the largest cost after raw materials, including labor costs.
Experts warn that higher electricity prices mean that there is less and less money left to implement new equipment and technologies.
High costs also discourage potential investors, “seriously impairing the sector's ability to be competitive today and in the long term.”
UK Steel added: “This ultimately undermines the future of the entire UK steel sector.”
