“Lower Power Prices” Named as Key Demand for UK Steel’s EAF Future

A “clear future vision” for steel is meaningless if the factories can’t afford to turn on the lights. That’s the stark message from UK Steel, the industry lobby group, which responded to the government’s new EAF plan by demanding “lower power prices.”
Business Secretary Peter Kyle has championed a switch to electric arc furnaces (EAFs) at Scunthorpe. This “cleaner” technology “use[s] electricity to melt down scrap steel.” The key word is electricity.
This makes UK Steel’s demand for “lower power prices” the most critical factor in the plan’s success. The UK’s industrial electricity costs are notoriously high, a key reason the industry is uncompetitive. Switching to a more electricity-intensive process without fixing that underlying cost is a recipe for failure.
Frank Aaskov of UK Steel called for a “stronger business environment,” with lower power prices and “robust trade policies” as the two main pillars. The EAFs, while “encouraging,” are secondary to these fundamentals.
The government’s December strategy must now address this. It cannot simply fund the capital cost of the new furnaces; it must also reform the energy market that will power them. Without that, the “green” new plant will be just as “financially unviable” as the “carbon-heavy” old one.