APMG Energy Intensive Industries Roundtable 2: Energy pricing and competition
Yesterday The All-Party Parliamentary Manufacturing Group (APMG) hosted the second in a four part roundtable series on the Energy Intensive Industries and their transition to net zero, in collaboration with the Energy Intensive Users Group (EIUG).
This session comes at an opportune moment given the recent increases in energy prices, and considered the specific impact of these increased prices on the ability of energy intensive industries to continue operating this winter. The scale of the increases has been unprecedented, with several suppliers having already exited the market, while the impact on EIIs has already been felt in the fertiliser and steel sectors and widely in the industries they supply.
We got to hear how inward investment, growth and competitiveness in the UK’s energy intensive sector have been hampered for years by UK energy costs being higher than those of international competitors. In some cases, investment, economic activity & jobs have relocated abroad, leading to a subsequent increase in imports. With that in mind, what exactly are the causes behind the UK’s structurally uncompetitive industrial energy prices?
The session was chaired by Mark Pawsey MP, co-chair of the APMG as well as a commissioner on the Manufacturing Commission, who introduced the event and speaker and set the agenda for the discussion.
Dr Richard Leese, Chair EIUG
- introduced the EIUG and outlined the problems with energy prices and how they diverge from competitors in Europe.
Martin Brunnock, Manufacturing Director at Tata Steel
- spoke on challenges faced because of energy pricing, electricity self-sufficiency as well as the health and safety impacts if Tata Steel would lose power to one of their sites.
Debbie Baker, Public Affairs Director at CF Fertilisers
- spoke on how the gas price increase impacts them, the difficulties to manage it and remain competitive with European businesses not faced with the same increase in charges. “The energy price increase is a car crash that has long been in the making.”
Gergely Molnar, Energy Analyst - Natural Gas, the International Energy Agency
- brought the international perspective into the discussion explaining the unprecedented surge in gas prices pointing out extreme weather conditions, climate change and delayed maintenance while noting that we have a difficult winter ahead of us.
Following the presentations from our speakers, Mark Pawsey MP opened the floor for general discussion which covered a range of topics including what needs to be done to ensure industry gets the support it needs from the government and whether we consider homeowners ahead of industry and perhaps to the disadvantage of industry.
This session was the second roundtable in a four part series.
The first roundtable in June 2021, attended by Lord Grimstone minister for investment laid out the core themes of the series and set the scene for subsequent sessions. Read the summary here.
The final two round tables will address policy issues in more detail - first focusing on the role of external and internal drivers including new technologies that will support their transition, before finally discussing medium and long-term climate and energy policy changes and the global net zero ambition.
A full summary can be found here