Electricity prices for UK Industry Will Soar

Economic suicide is stupid.business-graph

Electricity prices to UK industry will soar by the end of the decade, offering little comfort to those already concerned about the impact they’re currently having on sectors such as steel.

Depending on your news source or how you filter your personal prejudices, energy prices are either the cause of the UK steel crisis or peripheral to it.

One thing which is not in dispute, however, is that electricity costs to industry are set to rise sharply over the coming years.

New research by Tyneside firm Utilitywise highlights this stark reality – the consequence of measures to combat climate change such as the Renewables Obligation, Contracts for Difference and the Capacity Market levies.

The North Tyneside firm believes the wholesale electricity cost to industrial users will stay flat at around £40 Per MW/h between now and 2021.

However, taking into account climate change mitigation policy costs, network and transmission charges, the total charge for a MW/h of electricity will rise to more than £110 over the same period.

A UK Government compensation scheme will limit the rise to around £82 per MW/h for the most energy intensive industries, but this is still prompting further concerns about ‘carbon leakage’, while casting a shadow over hopes to attract further investment into the North East.

Stan Higgins, chief executive of NEPIC (North East Processing Industry Cluster), says high energy costs are damaging all British industry.

 

 

Advertisements

EU/UK Steel: A Tiny Bit Of Sanity (That Won’t Go Anywhere)

 

Cheap Chinese steel is killing the EU/UK steel industry. The reasons are pretty simple. China relies on cheap coal for most of its energy needs while the UK and EU are squandering trillions to build wind farms and solar farms (in a northern climate?). And fossil fuels are punished.

I’ve been going on about this for a while. It is amazingly stupid to drive all the jobs from the UK/EU (or Canada) to China where the energy is dirtier and the labor conditions are appalling.

So there is this German Government minister who maybe finally got it.

In the fight against cheap steel from China, German Economics Minister Sigmar Gabriel (SPD) is proposing a ‘climate MOT’ for imported products: “At the level of the World Trade Organization there are forms of certification, for example, where the environment, nature or health are at risk. I can imagine a similar certification for steel products, a kind of `climate MOT` for steelmaking, Gabriel told the Westdeutsche Allgemeine Zeitung on Wednesday. “The basic idea: Only those are allowed onto the European market who comply with the same standards that we meet in the EU.” Gabriel called on the EU to adopt a tougher stance in the dispute with China over cheap steel.SteelMill_interior

MOT = Ministry of Transport. This is shorthand for: “To drive a car it must be tested and running at a certain level of safety and air cleanliness.”

The same should be true for importing any goods. If it is steel imported from China to the UK, the energy used in China must be as “clean” as the energy mix forced onto steelmakers in the UK and the wages must be comparable.

The sane should be true for all manufactured goods.

But what really happens is that the coal power plants producing cheap electricity are shut down in the UK and the steel is made in China. And the jobs (paying much less) go to China. And more CO2 (which I don’t care about … but some do) is produced than if the steel was made in the UK. And 40,000 jobs disappear. While the rich laugh.

 

.

EU Subsidized Cheaper Energy For China Steel

 

Every once in a while I joke that China has a spy high up in the EU making the EU do stupid stupid things … then I read these stories and I think I might be right.

British taxpayers have been forced to subsidise the very Chinese steel companies that are threatening 40,000 UK jobs, critics say.

It comes after revelations that the European Investment Bank has given so-called “soft loans” to China of £80million as part of a climate policy intended to lower emissions.

The astonishing figures include a loan of £40million to one of the world’s worst “steel dumping” culprits, the Wuhan Iron & Steel Corporation.

To add insult to injury Wuhun, the world’s eighth largest steel producer, boasts the Chinese state as its main shareholder. Wuhun is such a prolific steel dumper that it has now been especially targeted by the European Commission, which wants to slap it with 36.6 per cent tariffs.

Just five years ago, however, EU bankers decided to lend it €50million (£40million) to put towards a €207million (£167million) Euro Combined Cycle Plant.

The loan was paid out under the China Climate Change Framework Loan II. The money is supposed to persuade the steel giants to invest in lower emission technology.

Furious critics last night pointed out the irony that the loan was concerned with reducing the cost of power generation while one of the complaints of Tata Group is the high cost of energy associated with its steel production operation in South Wales.

UK Industry Facing Massive ‘Green’ Power Costs

 

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.

– See more at: http://www.thegwpf.com/climate-policies-and-the-future-of-manufacturing/

 

UK Green Taxes Killing the Steel Industry

 

Green taxes are killing the UK steel industry.

The U.K.’s steel crisis – worsened by Tata Steel Ltd.’s decision to sell its plant in Port Talbot, South Wales – has been exacerbated by three green taxes that the government implemented to boost clean energy, according to the manufacturers’s association EEF.

The three levies are the Carbon Price Floor, Renewables Obligation and Feed-In Tariff policies. Each works differently. Together, they increase steelmakers’ energy costs by about 30 pounds ($43) per megawatt-hour this year, Richard Warren, senior energy and environment policy adviser for EEF, said in an interview.

Electricity is an enormous cost for steel companies. The U.K.’s seven steel plants used about 3.2 million megawatt-hours of power in 2014, according to the EEF, not including what they generated themselves.

The German solution is to exempt industries and pass the cost of those exemptions onto the poor and then kill them.

Europe’s suicidal green energy policies are killing at least 4o,000 people a year.

That’s just the number estimated to have died in the winter of 2014 because they were unable to afford fuel bills driven artificially high by renewable energy tariffs.

But the real death toll will certainly be much higher when you take into account the air pollution caused when Germany decided to abandon nuclear power after Fukushima and ramp up its coal-burning instead; and also when you consider the massive increase in diesel pollution –  the result of EU-driven anti-CO2 policies – which may be responsible for as many as 500,000 deaths a year.

 

 

UK Going Green By Shutting Down Industry

This is insane. And cruel to the formerly employed in the UK.

A fortnight ago, the energy minister, Andrea Leadsom, declared grandly that Britain, alone in the world, would commit to a target of reducing net carbon emissions to zero. ‘The question is not whether but how we do it,’ she told Parliament. It is now becoming painfully clear how this target will be reached: not by eliminating our carbon emissions but by exporting them, along with thousands of jobs and much of our manufacturing industry.

This week, Tata Steel announced that its entire UK business is to be put up for sale. That came after Stephen Kinnock, whose South Wales constituency includes Tata’s giant plant at Port Talbot, joined a union delegation to the headquarters of Tata Steel in India to beg the company to keep the plant open. Some 750 job losses have already been announced there; more than 1,000 jobs, including these, will be lost across Britain as our steel industry struggles to compete with lower-cost producers overseas.

Britain has the highest energy costs in Europe, thanks to decisions taken not in Brussels but in Whitehall. Crusaders like Ms Leadsom have, over the years, made sure that our manufacturers feel the force of green levies, unlike Germany, which exempts its own industry. The idea is that by making energy more expensive, people are encouraged to use less of it. This is working very effectively, as the soon-to-be-unemployed Welsh steelworkers will attest. If the plant closes, carbon emissions in Port Talbot will fall dramatically.

All European producers face much higher costs than Chinese steelmakers thanks to the EU Emissions Trading System. But Britain imposes its own green taxes on top of this in the form of the Carbon Price Floor and the Renewables Obligation — an epic act of self-harm. Tata points out that its energy costs for running steel plants in Britain are 25 per cent more than they would be in Germany and 50 per cent more than they would be in France. This is due to decisions by the UK government to spread the pain of green tariffs so that businesses are hit as hard as consumers.

The odds are that the steel being bought from China produces more CO2 than the steel bought from Tata in the UK.

Green offshoring is the suicidal act of idiots. They send the jobs and CO2 production overseas and do nothing for the people who lose their jobs.