The UK government has announced targeted measures to ensure the energy costs for key industries in the country are in line with other major economies worldwide. Dubbed the “British Industry Supercharger,” the initiative will exempt firms in energy-intensive sectors like steel, metals, chemicals, and paper from certain costs associated with renewable energy obligations, such as the Feed in Tariff, Contracts for Difference, & the Renewables Obligation, as well as the GB Capacity Market costs. The proposal will also explore reductions in network charges, which are costs paid by industrial users for the supply of electricity.
The new measures aim to level the playing field for British companies across Europe, supporting sectors that are particularly exposed to the cost of electricity. These industries employ around 400,000 skilled workers throughout the UK and support many more in their supply chains. In 2019, their exports made up approximately 28% of total UK exports.
Business and Trade Secretary Kemi Badenoch announced the measures, which will bring the energy costs of the UK’s energy-intensive industries in line with those charged across the world’s major economies. She stated that the support would allow strategically-important UK industries such as steel and chemicals to stay competitive on the world stage. By backing these businesses, we will help to keep the economy growing, while also providing high-quality jobs and investment into the UK, as well as the products needed for everyday life and work.
The new initiative will enhance the UK’s attractiveness as a destination for international investment and remove barriers to moving towards greener technology as part of a sustainable net-zero future. It will also form a critical part of the government’s wider plans to seize on the potential of new green industries like electric vehicle and battery manufacturing, where the UK is already a pioneer.
Gareth Stace, Director General of UK Steel, welcomed the announcement, saying, “UK industrial electricity prices have been uncompetitive for many years, and today, the government took a great step towards leveling the playing field for the steel industry. We are delighted to hear this announcement and look forward to collaborating with the government to ensure our prices are equivalent to those of our European counterparts. In order to remain competitive in both the European and global steel markets, it is essential that we are able to compete on an equal footing in the short term”.
The delivery mechanisms and timelines for implementing the British Industry Supercharger will be consulted on in the Spring, with an expectation that they’ll be rolled out from Spring 2024 onwards.
Source: Gov[Dot]UK
