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Comparison Of Industrial Electricity Prices In The EU

April 6, 2016

By Paul Homewood

 

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https://notalotofpeopleknowthat.wordpress.com/2016/04/04/uks-crippling-energy-bill-for-industry/

 

I published this chart a couple of days ago, which showed how high electricity prices were for UK steelmakers. It prompted the question as to why Germany’s prices were not just as high, given their renewables agenda.

The simple answer is that Germany does not pass on these extra costs to the larger energy consumers.

 

DECC publish international comparisons of electricity prices for industrial users, split into four categories:

 

Industrial Electricity Eurostat size band Annual consumption (MWh)
Small Band IB 20 – 499
Medium Band ID 2,000 – 19,999
Large Band IE 20,000 – 69,999
Very Large Band IF 70,000 – 150,000

 

The prices for 2015 compare as follows: 

 

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https://www.gov.uk/government/statistical-data-sets/international-industrial-energy-prices

 

We can see that UK prices are consistently above the EU15 median, but particularly so as consumers get bigger. In contrast, German prices are higher than ours for small users, but get progressively less, as you go up the scale.

Interestingly, Italy’s prices are also comparatively high, which may partly explain their economic struggles in recent years.

 

 

 

Ironically, a report just out from the German research institute Prognos is warning that EU proposals to tighten up the Emissions Trading Scheme could spell the death knell for the German steel industry, as GWPF report:

 

The planned reform of CO2 emissions trading in Europe threatens hundreds of thousands of jobs in Germany. This is the conclusion of a study by the research institute Prognos and commissioned by the German Steel Association. “The industrial business model of the German economy is at stake,” warned association president Hans Jürgen Kerkhoff.

A significantly tougher Emissions Trading Scheme, as envisaged by Brussels from 2021 onwards, could in a few years lead to a rapidly progressing de-industrialisation in important parts of the value chain since nothing like it exists anywhere else in the world. “The consequences for the German economy would be grave,” Kerkhoff said.

According to the Prognos study, production and employment in the German steel industry would collapse by two thirds by 2030. “Add to that employment losses in upstream and downstream industries,” the study says. And that’s not all: “The consequences go far beyond the industrial value chain,” study author Jan Limbers from Prognos. The researcher sees a total of 380,000 jobs at significant risk, mostly in the services sector, e.g. in retail and in the hospitality industry or in logistics and finance. “Businesses and households will have less income for consumption and investment,” said Limbers who also sees a decline in gross domestic product of 30 billion euros.

http://www.thegwpf.com/eu-climate-policy-threatens-future-of-european-steel-industry/

 

Welcome to the club!

10 Comments leave one →
  1. Kevin B permalink
    April 6, 2016 11:27 am

    “How much for those apples?”

    “50p a pound.”

    “I’d like a ton. Can we do a deal?”

    “Sure.” Consults government regs, “A ton will cost you 90p a pound.”

    “I think I’ll take my business elsewhere. Like China for instance.”

    And that kiddies, is what happens when government interferes with a market.

  2. April 6, 2016 12:03 pm

    Sadly the South Wales steel problem may make things even worse in the UK. The Gupta family, whose rescue bid is getting much airtime on the BBC, is heavily into farming renewable subsidies. They already own an old coal-fired power station at Uskmouth, for the purpose of converting it to biomass, and have a lot of money in proposals for Tidal Lagoons:

    http://www.southwalesargus.co.uk/business/14244819.Gupta_interests__which_rescued_Newport_s_Liberty_Steel__makes_strategic_investment_in_UK_tidal_lagoon_programme/

    South Wales may become a giant recycling and renewables centre, rather like many Third World countries. Will the UK govt see through or bow down before the “green” hype?

    • April 6, 2016 3:42 pm

      No you mislead ..I thought you were implying the billion pound Swansea lagoon is theirs

      “have committed to an investment of at least £10m over time in the development of tidal lagoon power plant in the UK and India.”
      That is NOT ‘have a lot of money in proposals for Tidal Lagoons’

      but BBC report carries this worrying dogma line see the latest Bishophill post

      Mr Gupta would want to change that and instead make what he called “green steel” – in other words make steel by melting and recycling scrap steel using an electric arc

      Seems daft, cos it’ll take a year to build electric arc furnaces.
      PS Where the heck is the electricity for the furnace gonna come from ..you can’t power something that big from wind/solar ?

    • April 6, 2016 3:46 pm

      No Jesus, your’re right further down the page it says “The deal sees Gupta interests take a substantial stake in Tidal Lagoon Plc”

      This could end up a mess of we’ll save the steelplant today, if you sign the ridiculous subsidy contract for 100 years for the Swansea Lagoon

  3. April 6, 2016 2:02 pm

    I’m wondering about agricultural electricity France in particular …. a pal of mine who’s got a farm over there has said he gets a preferential and generous deal on his electrons.

  4. April 6, 2016 5:15 pm

    Apparently the Teeside scheme collapse is going to cost Air Products (or probably other people) £ 770m: a serious loss. Air Products were also fronting the White Rose CCS project, not a good record on Teeside!

  5. April 7, 2016 8:23 am

    Paul the Eurostats info are due to be updated in May 2016
    Your graphs show costs for steelmakers
    but their 2015 graph is all industrial customers
    from their Electricity_price_statistics page
    2015 graph eg Swden pays 6c/KWh UK pays 13c, but a small part of the UK cost is tax whereas say in Italy 7c of the 15c is tax so I wonder if they claim that back

  6. It doesn't add up... permalink
    April 7, 2016 10:59 pm

    Looking at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/504857/Sub-national_electricity_consumption_statistics_2005_2014_published_Jan_….csv I find that the consumption by non-domestic users in Neath/Port Talbot was 1647GWh in 2014, so the steel works probably account for a TWh or more out of that (nearby Bridgend dominated by its Ford plant consumed 497GWh under the same heading). So if green taxes or price penalties against competition on the Continent were over £30/MWh, that’s £30m of cost right there. Now, where is Brdegend to get the steel for its engine castings?

    The automotive industry is so competitive internationally that without government backing, companies are likely to go elsewhere.

    http://www.bbc.co.uk/news/uk-wales-south-east-wales-34359399

    I wonder how secure those 10,000 jobs that depend on it are with a longer supply chain.

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