British steelmakers are paying nearly £30 more per megawatt hour for electricity than French rivals, the widest gap in three years, after the US-Israeli war on Iran drove up global gas prices.
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01Summary
- 01The electricity premium paid by UK steelmakers over French competitors has risen to almost £30 per megawatt hour, its highest in three years, according to UK Steel.
- 02The gap had fallen to £18 per megawatt hour last year, but surged after global gas prices spiked due to the US-Israeli war on Iran.
- 03About 75% of British exported steel, worth roughly £3bn, goes to the EU, making the cost comparison with European rivals critical.
- 04UK Steel has proposed a price cap costing about £51m a year, with the government covering the difference when prices exceed the cap.
- 05The government said it has reduced electricity bills by up to 25% for over 10,000 manufacturing firms and cut costs for electricity-intensive businesses by £1bn per year.
02Why it matters
Higher electricity costs undermine the competitiveness of UK steelmakers, which export most of their steel to the EU, threatening jobs and the government's reindustrialisation plans.
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