Steel campaigners demand action over soaring energy costs amid shutdowns

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Some plants have halted production because of spiralling power prices

Steel industry campaigners tonight urged the Tories to be ready to intervene as some firms suspend operations amid soaring energy costs.

Prices have rocketed in recent weeks – forcing some companies to halt production.

The Mirror told earlier this year how cash-strapped British metals’ firms pay twice as much for electricity as French rivals and 50% more than German counterparts.

An industry study, The Energy Price Scandal: A Fair Power Deal for UK Steel, showed the average electricity price for steel producers in the UK is about £65 per megawatt hour (Mwh), compared with £31/MWh in France and £43/MWh in Germany.

Experts warned then the extra overheads will hamper attempts to make the industry more environmentally-friendly by slashing emissions.

Now costs have soared even more.

Community steelworkers’ union operations director Alasdair McDiarmid told the Mirror tonight: “The spikes in electricity prices are incredibly concerning and a threat to UK steelworkers.

“We need urgent action to combat the UK’s sky-high prices.

“There is currently a huge price inequality when it comes to electricity prices, with the UK paying twice as much for electricity as our EU competitors.

“This puts us at a major competitive disadvantage as well as being a barrier to delivering the Government’s climate objectives.

“We know with the right framework of support our industry has a bright future at the core of a low carbon economy, but we need the Government to back us by tackling electricity prices as part of a comprehensive strategy to decarbonise British steelmaking.”

UK Steel director-general Gareth Stace said: “These extortionate prices are forcing some UK steelmakers to suspend their operations during periods when the cost of energy is quoted in the thousands per megawatt hour; last year, prices were roughly £50 per megawatt hour.

“Even with the global steel market as buoyant as it is, these eye-watering prices are making it impossible to profitably make steel at certain times of the day and night.

“While prices have risen across Europe, wholesale prices have quadrupled in the UK and merely tripled in Germany, when accounting for carbon costs.

“This exacerbates the already grossly unequal electricity price disparity between UK steelmakers and our European competitors.”
He said the “Government and Ofgem must be prepared to take action as this situation continues”, adding: “Electricity prices increase in the winter months, therefore the situation gets more urgent each and every day.”

Labour MP for Aberavon Stephen Kinnock, who chairs the All-Party Parliamentary Group on Steel and Metal-Related Industries, said: “The UK Government says it wants to level up and yet it is doing absolutely nothing about the spiralling energy costs that are crippling the British steel industry.

“Our steelworkers make the best steel that money can buy, but they’re being forced to compete with one hand tied behind their backs by a government that is all talk and no action.”

A Business, Energy and Industrial Strategy department spokesman said: “We are determined to secure a competitive future for the UK steel industry and in recent years have provided it with extensive support, including over £600m to help with the costs of energy and to protect jobs.

“The UK benefits from having access to highly diverse sources of gas supply, but our exposure to volatile global gas prices underscores the importance of our plan to build a home-grown renewable energy sector.

“We are monitoring the current situation closely and are in regular contact with heavy industry, including steel producers, to help them manage the current situation.”

The Mirror has been campaigning to Save Our Steel since the industry was hit by plant closures and thousands of redundancies in 2015.