Key facts
- Electricity cost premium for UK steelmakers over French rivals reached nearly £30/MWh.
- UK Steel estimates a price cap would cost £51 million annually.
- About 75% of UK steel exports, worth £3 billion, go to the EU.
Global gas prices have surged due to the conflict involving Iran and the US, pushing electricity costs for British steelmakers to their highest level in three years compared to European rivals. The premium paid by the UK industry over its French counterpart has reached nearly £30 per megawatt hour, according to UK Steel. This widening gap is attributed to the UK's reliance on gas for electricity generation, which dictates prices even for cheaper sources like wind and solar power. France's electricity prices are largely set by nuclear reactors, while Germany still uses coal extensively. The UK government has implemented measures to reduce electricity bills for manufacturers, but UK Steel argues direct subsidies are necessary to maintain competitiveness.