UK industry is facing massive energy ‘policy’ cost increases. This article summarizes the estimated costs for energy intensive users (like steel mills) and the businesses that rely on them:
In 2014 DECC estimated that prices to Energy Intensive users were 26% higher than they would be in the absence of policies.
By 2020, in the Low Fossil Fuel price scenario, which now seems more likely than not, a large Energy Intensive Industry (EII) with a full cost relief package would face electricity prices (p/kWh) that are 22% higher than they would be in the absence of policies.
Those unable to qualify for relief would see prices 76% higher than they would be without policies. No estimates are available for 2030, perhaps because DECC does not expect there to be any Energy Intensive Industries remaining in that year.
The electricity price impacts on other parties trading with EIIs are also large.
Medium sized businesses would see prices 77% higher than they would be in the absence of policies in 2020, and 114% higher in 2030.
Small sized businesses would see prices 61% higher in 2020 and 95% higher in 2030.
Domestic households would see prices 42% higher than they would otherwise be in 2020 and 60% higher in 2030.
To these must be added electricity system costs, for grid expansion and management, and in the presence of large renewable fleets these could easily reach totals not much less than the subsidy costs themselves.