UK Steelmakers Face Record Electricity Cost Disadvantage

British steelmakers are facing their highest electricity cost disadvantage against European rivals in three years, with prices nearly £30 per megawatt hour higher than those in France. This surge follows the closure of the strait of Hormuz by Iran in response to a bombing campaign by Donald Trump, which drove up global gas prices.

Because the Government of the United Kingdom relies heavily on gas for power generation, wholesale gas prices directly dictate electricity costs. In contrast, France utilizes nuclear power and Germany utilizes coal, shielding them from the same volatility. UK Steel, an industry lobby group, warns that these costs are a primary obstacle to the national goal of reindustrialization.

To maintain competitiveness, UK Steel argues that the government must implement direct subsidies and a price cap costing approximately £51 million annually. While the administration under Keir Starmer has reduced some policy-driven costs and announced broader industrial strategy jobs plans, industry leaders maintain that the price gap with European competitors remains unsustainable.