The UK-based trade association UK Steel has discussed electricity costs for the local steel industry and their effects in its latest report. The association stated that wholesale electricity prices have more than doubled to about £66/MWh, compared to France's £27/MWh and Spain's £28/MWh, over the past three months. As the UK steel industry is heavily dependent on electricity and with new electric arc furnace (EAF) capacities becoming operational, electricity consumption is expected to approximately double in the future. Even though the previous government had adopted a policy in April this year that reduced costs and partly lowered network charges, local steelmakers are still facing substantially higher wholesale costs than their competitors, negatively affecting their competitiveness, their ability to attract investment and their decarbonization efforts.
Thus, UK Steel has called on the next government to provide solutions to this challenge and has asked for an affordable energy supply in order to increase investments in EAF-based steelmaking.
"The steel industry is the foundation of the UK's manufacturing and economic strengths. We must not lose sight of how important electricity costs are in the move to green steel as we fully switch to electric arc furnace technology to secure steel for our nation," Frank Aaskov, manager of energy and climate change policy at UK Steel, stated.
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