A new report has found that British industry is paying a third more for electricity than a number of its European counterparts that have benefitted from better interconnections, more accessible cross border trading and longer-term supply contracts, reducing the competitiveness of the UK market.
The report by University College London (UCL) will reignite the debate on the vast energy bills faced by industry, during a time when the government’s attention is on reducing the carbon emissions of its energy sources.
The political focus on household energy bills has meant industrial bills have been ignored, meaning heavy energy users, such as steel and ceramic companies, face an extra £43 million in annual costs, the second highest energy rate in Europe after Denmark.
According to the UCL report, in 2016 UK was paying an average of 35% above the EU average for industrial electricity, due to the continent’s superior interconnections, which is making British businesses less competitive.
The report said the UK government must focus its attention on improving network connections with wider Europe to help UK wholesale prices reach a par with those in Europe, adding that companies should be encouraged to acquire energy from the continent through interconnectors to push this change.
Meanwhile, the report’s authors suggested the UK should leave the EU in a fashion that ensures “unrestricted access to the internal energy market.”