Warning as Britain pays the highest electricity prices in the world | UK | News

British companies pay the highest electricity prices in the developed world, government figures show.

In just five years, the cost of feeding British industry has risen by 124 percent, with prices almost 50 percent higher than those in Germany and France.

Compared to the United StatesElectricity prices in Britain are four times higher, according to official figures released on Thursday (September 26).

Frank Aaskov, director of lobby group UK Steel, said high industrial prices have damaged the competitiveness of British steelmaking for too long and that many in the manufacturing sector will feel the same pressure.

He told the Telegraph‘The Government must tackle high electricity costs and make Britain a fertile place for investment, while enabling growth and improving competitiveness.’

The figures show that industrial users in Britain paid 25.85 cents per kilowatt hour last year. Five years ago the price was 10.43p.

French companies paid 17.84p, German companies 17.71p and those in the US 6.48p in 2023.

The UK price was higher than that of the International Energy Agency’s 31 member states, where the median was 17.70 pence per kilowatt hour.

UK Steel’s analysis published in July found that wholesale electricity prices in Britain over the past three months were more than double those in France and Spain.

The lobby group warned that the data showed an “alarming” trend in industrial energy costs and urged the new government to fix the problem.

Electricity demand from UK steelmakers is expected to grow as a result of the switch to electric arc furnaces, roughly doubling the sector’s electricity consumption, UK Steel said.

Mr Askov previously said: “The steel industry is the foundation of Britain’s manufacturing and economic strength.

“We cannot lose sight of how important electricity costs are in the transition to green steel as we fully transition to electric arc furnace technology to secure steel for our nation.”

The last government introduced a ‘supercharger’ rebate in April, which removed the cost of renewable charges and the capacity market charge and partially reduced network charges.

But UK steelmakers still face substantially higher wholesale costs than their competitors and network costs ten times higher than in France.

Even with the rebate, the UK steel sector reported energy costs were around twice as high as in Germany, attributing the difference to high natural gas prices in Britain, which pushed up energy prices in the UK.

According to government statistics, renewables, especially wind and solar, now make up more than half of the UK’s energy mix.

But wholesale electricity prices are set based on the most expensive method necessary to meet demand, meaning gas prices are usually followed.

Earlier this month, the government awarded contracts for a new wave of green energy projects, including onshore and offshore wind and solar farms. Officials said this will provide enough power for 11 million homes.

News of Britain’s high electricity costs came on the same day it emerged that Britain’s last remaining coal-fired power station would close at the end of September.

Ratcliffe-on-Soar power station has been generating electricity since 1968 through four coal-fired boilers, eight huge cooling towers and a 199 meter high chimney, which takes pride of place in the East Midlands skyline.

Ratcliffe will close for the final time on September 30, ending the country’s use of coal for electricity.

Next comes the bigger task of significantly reducing gas use and further increasing renewables as the Labor government aims to achieve net zero emissions from electricity generation by 2030.