British steel trade associationUKSteel has issued a public plea and called on theUKgovernment to extend and improve the Energy Bill Relief Scheme (EBRS), which is due to end in March next year.
Electricity costs in theUKhave increased further this week and exceeded £1,500/MWh.UKSteel stated that some facilities have even temporarily stopped production due to the higher energy costs.
“Massive electricity price spikes this week have all but broken the Energy Bill Relief Scheme, which aims to shield industry from sustained, unsustainable price levels. Electricity prices are at 30 times their historical average this week, forcing some steel companies to cease production at key times during the day. This is simply not sustainable for the steel sector,” Gareth Stace, director general ofUKSteel, said.
Requesting a temporary solution from the government until a longer-term plan is developed, Mr. Stace stated that the German government is working on a plan to guarantee wholesale electricity prices at €130/MWh for the full year of 2023, against £211/MWh in theUK. Meanwhile, the gas prices guaranteed by theUKgovernment stand at £75/MWh.
“Without the continuation of the EBRS, our estimates show electricity prices being double those of German industry’s next year, leading to reduced production, shrinking market share and increased imports,” Gareth Stace said.
TheUKgovernment had announced the Energy Bill Relief Scheme for the period between October 1, 2022, and March 31, 2023, to help businesses against increasing energy costs.