UK Steelmakers Badly Hit by Spiraling Electricity Costs

SEATTLE (Scrap Monster): According to latest study report, UK steel firms are seen to be hit badly by rising electricity costs. The costs for steelmakers in the country are estimated to be much higher when matched with rivals in other countries.

The average price paid by British steelmakers in financial year 2023/24 stood at £113 per megawatt hour (MWh), said UK Steel. This compares with average price of £61/MWh paid by German and French steelmakers. The UK manufacturers will have to pay £117million more for power than their peers in European countries.

RELATED NEWS:

Tata Steel Boses Meet Unions Amidst Job Loss Fears

Union Urges Government to Tackle the Crisis in UK Steel Industry

The report noted that the shift from blast furnaces to electric arc furnaces will boost the requirement and consumption of electricity. Of late, steel giants Tata Steel and British Steel had announced plans to replace the traditional coal-fired furnaces with less-polluting electric arc furnaces.

The trade group noted that electricity costs will play a key role in the industry’s coveted green steel journey. The electricity bills in the UK are partly on account of higher grid connection costs, which the government could reduce further, said Gareth Stace, Director General, UK Steel.

Even with the support of the “British Industry Supercharger” scheme announced in February this year, the British firms could end up paying higher prices, in comparison with European competitors.