This is Britain’s Once-in-a-generation drive for energy strategy. Britain’s strategic heavy industries have warned they risk being left high and dry by a lack of support in the government’s upcoming energy strategy, warning that failure to follow European countries’ measures to reduce gas and electricity costs will put UK businesses at risk.
Once-in-a-generation Drive
The government is expected to outline long-awaited proposals this week for a once-in-a-generation drive to invest in nuclear power and possibly more onshore wind and solar power, as well as approve continued North Sea oil and gas exploration. The plan expected to be set out by ministers on Thursday has been delayed amid disagreements in the cabinet about which technologies to back, including a fraught battle over new nuclear power plants, with the Treasury thought to be reluctant to invest large sums in costly projects.
One industry source said heavy energy users were “not expecting anything” to help them on gas or electricity, the latter of which can cost up to 60% more than the price paid by European competitors.
Ballooning Energy Bills
Against a backdrop of ballooning energy bills for strategically important companies and major manufacturing firms, energy-intensive industries told the Guardian that the mixed messages had left them fearing they will receive minimal help or none at all. Richard Warren, a spokesperson for the trade body UK Steel, said it had “long urged the government to reduce the politically and regulatory controlled elements of electricity bills in line with action taken by governments elsewhere”.
Simply renewing a compensation scheme that gives electricity intensive industries a refund on the cost of the UK’s emissions trading scheme, but which expired on Friday, would be only a “partial solution”.
UK Steel said the industry “needs full compensation for the costs of carbon in electricity, an increase in the relief on renewables levies, and similar reductions in network costs as already provided by governments in France, Germany, and the Netherlands”.
Rationing Energy
Over the weekend, the transport secretary, Grant Shapps, rejected calls for the UK to consider rationing energy, as ministers explore ways to boost Britain’s resilience to international shocks to oil gas markets after the Russian invasion of Ukraine led to record increases in costs. Chemicals companies use disproportionately large amounts of electricity in their processes. Inovyn, a chlorine manufacturer that operates from a plant in Runcorn on the banks of the Mersey, uses as much electricity as the nearby city of Liverpool.
