Iron and Steel: Energy Intensive Industries
The question
To ask the Secretary of State for Business and Trade, what assessment his Department has made of the comparative level of the steel power price gap with competitor nations, following the recent increase in network compensation charging.
Answered by Chris McDonald
As set out in the recently published steel strategy, UK steel producers that benefit from British Industry Supercharger support and the current Network Charging Compensation scheme paid industrial electricity prices of £93 per MWh in 2025 (a 60% relief). The increase in compensation for network charges from 60% to 90%, which was announced in the Industrial Strategy and implemented from 1 April 2026, will reduce electricity prices for steel producers by a further £7 to £10 per MWh approximately.
The equivalent cost faced by industrial electricity users in France and Germany is £69/MWh and £60/MWh respectively. Using average electricity intensity factors for electric arc furnace-based steel production, the difference to UK producers equates to approximately £8-£13 per tonne of crude steel.
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