Ministers weigh up plan to cut industrial energy prices
The government is considering a plan to slash industrial energy prices for British businesses, enabling them to better compete with key European rivals.
According to Sky News, proposals to make energy prices more competitive are central to final discussions between the Department for Business and Trade and the Treasury ahead of the publication of the government’s industrial strategy next week.
It was revealed earlier this week that Britain’s industrial sector has been forced to pay an extra £29bn to fund rising energy costs over the past four years.
UK industrial electricity prices are the highest in the G7 and 46 per cent above the average of the International Energy Agency, the intergovernmental body that accounts for three-quarters of global demand.
According to the Energy and Climate Intelligence Unit (ECIU), the gas costs of UK firms have doubled over the last few years, while electricity costs have risen by 60 per cent. They are four times those in the US and significantly higher than the likes of Canada and France.
UK steel plant’s energy bills rise 80 per cent
The steel industry has been particularly badly affected, with the average plant’s energy bill rising 80 per cent since just 2021, the year before Russia’s invasion of Ukraine.
IEA data shows British companies paid out £258 per megawatt-hour for electricity, compared to £178 in France and £177 in Germany.
Business secretary Jonathan Reynolds has refused to confirm outright whether next week’s industrial strategy will include a roadmap to cutting industrial energy prices. However, he has said that it is an “area of considerable government activity.”
The boss of the Confederation of British Industry (CBI), Rain Newton-Smith, has suggested that the cost of some net zero policies, including building out the national grid and rolling out renewables at a rapid pace, has bumped up electricity prices.
Ministers hope that green lighting the £14.2bn Sizewell C nuclear plant in Suffolk, per the Spending Review, will help to lower costs down the line.
