The China Mail - UK manufacturers struggle under sky-high energy bills

USD -
AED 3.672501
AFN 62.498209
ALL 81.422638
AMD 375.987135
ANG 1.789731
AOA 916.999897
ARS 1393.488201
AUD 1.41434
AWG 1.80125
AZN 1.692693
BAM 1.651028
BBD 2.011625
BDT 122.04171
BGN 1.647646
BHD 0.376987
BIF 2961.355818
BMD 1
BND 1.26194
BOB 6.916346
BRL 5.223697
BSD 0.998767
BTN 90.537432
BWP 13.179633
BYN 2.846458
BYR 19600
BZD 2.008636
CAD 1.36456
CDF 2254.999774
CHF 0.770498
CLF 0.021951
CLP 866.749761
CNY 6.90865
CNH 6.88693
COP 3661.14
CRC 480.266768
CUC 1
CUP 26.5
CVE 93.080874
CZK 20.49155
DJF 177.855069
DKK 6.306515
DOP 61.63522
DZD 129.755025
EGP 46.904703
ERN 15
ETB 155.357731
EUR 0.844149
FJD 2.19495
FKP 0.733723
GBP 0.737605
GEL 2.670276
GGP 0.733723
GHS 10.981061
GIP 0.733723
GMD 73.500637
GNF 8767.116349
GTQ 7.659873
GYD 208.950814
HKD 7.81553
HNL 26.437888
HRK 6.360597
HTG 130.921677
HUF 319.125022
IDR 16872
ILS 3.101145
IMP 0.733723
INR 90.610197
IQD 1308.300762
IRR 42125.000158
ISK 122.400318
JEP 0.733723
JMD 155.864439
JOD 0.708999
JPY 153.492019
KES 128.840061
KGS 87.450115
KHR 4014.267322
KMF 417.000062
KPW 899.945579
KRW 1444.305015
KWD 0.30646
KYD 0.832355
KZT 490.203362
LAK 21396.432521
LBP 89436.051984
LKR 309.009868
LRD 185.75577
LSL 16.027655
LTL 2.95274
LVL 0.60489
LYD 6.296009
MAD 9.113403
MDL 16.998286
MGA 4372.124435
MKD 52.036247
MMK 2100.026497
MNT 3569.36106
MOP 8.041348
MRU 39.870837
MUR 45.930509
MVR 15.404935
MWK 1731.881305
MXN 17.145502
MYR 3.902513
MZN 63.897068
NAD 16.027655
NGN 1345.449708
NIO 36.756574
NOK 9.54177
NPR 144.867671
NZD 1.665848
OMR 0.3845
PAB 0.998746
PEN 3.343252
PGK 4.290237
PHP 57.954986
PKR 279.303536
PLN 3.561397
PYG 6528.162356
QAR 3.640086
RON 4.301298
RSD 99.079037
RUB 76.3497
RWF 1458.697396
SAR 3.750058
SBD 8.05166
SCR 14.275463
SDG 601.503582
SEK 8.976375
SGD 1.263205
SHP 0.750259
SLE 24.450079
SLL 20969.49935
SOS 569.834242
SRD 37.700992
STD 20697.981008
STN 20.68296
SVC 8.738889
SYP 11059.574895
SZL 16.022895
THB 31.245992
TJS 9.447636
TMT 3.51
TND 2.884735
TOP 2.40776
TRY 43.742896
TTD 6.772807
TWD 31.387986
TZS 2590.903014
UAH 43.219113
UGX 3530.350291
UYU 38.805202
UZS 12175.520644
VES 395.87194
VND 25970
VUV 119.088578
WST 2.704899
XAF 553.7605
XAG 0.0135
XAU 0.000203
XCD 2.70255
XCG 1.799948
XDR 0.6887
XOF 553.755825
XPF 100.676183
YER 238.375016
ZAR 16.017897
ZMK 9001.204962
ZMW 18.47176
ZWL 321.999592
  • CMSD

    0.0800

    23.72

    +0.34%

  • BCC

    -0.4300

    86.07

    -0.5%

  • JRI

    -0.0200

    13.22

    -0.15%

  • BCE

    0.0800

    25.79

    +0.31%

  • NGG

    0.0200

    92.42

    +0.02%

  • CMSC

    0.1100

    23.86

    +0.46%

  • RBGPF

    0.1000

    82.5

    +0.12%

  • BTI

    -0.5900

    58.91

    -1%

  • GSK

    1.9400

    60.87

    +3.19%

  • RIO

    -1.1900

    96.88

    -1.23%

  • AZN

    3.9300

    209.48

    +1.88%

  • RYCEF

    0.4500

    17.55

    +2.56%

  • VOD

    0.0900

    15.66

    +0.57%

  • RELX

    -0.6100

    30.45

    -2%

  • BP

    -0.1000

    37.56

    -0.27%

UK manufacturers struggle under sky-high energy bills
UK manufacturers struggle under sky-high energy bills / Photo: © AFP

UK manufacturers struggle under sky-high energy bills

Molten glass drops through chutes before being blown into bottles at manufacturer Encirc's northwest England plant, where intensive operations are under strain from exorbitant energy prices weighing on Britain's heavy industry.

Text size:

"We're paying a lot more energy costs than our European competitors," said Oliver Harry, head of corporate affairs at Encirc, which makes over a third of the UK's glass bottles.

Britain has some of the highest energy prices in Europe, driven by its reliance on natural gas and the costs of transitioning to renewables, which are passed on to bills.

The country's industrial electricity prices were also the steepest in Europe in 2024, according to the latest annual government data.

Standing in the intense heat of the factory's two huge furnaces, Harry warned: "We're already seeing an increase in imports into the UK as customers turn to cheap, more unsustainable glass producers", notably from China and Turkey.

- More action needed -

Across energy-intensive industries -- from steel and chemicals to glass and cement -- companies are warning that government support does not go far enough to keep them competitive.

The government said it will increase discounts on electricity network charges to 90 percent from April, which will save around 500 of the UK's biggest energy users a cumulative £420 million ($570 million) per year in electricity bills.

"Lowering bills is central to every decision we make," a government spokesperson told AFP.

But the steel sector, already weakened by the closure of traditional coal-fired blast furnaces, argues that more action is needed.

"The industry still faces industrial power prices almost 40 percent higher than in France and Germany," Gareth Stace, director general of the steel union, UK Steel, told AFP.

The union has called for stronger protections similar to those in France, Italy, Spain and the UAE to shield heavy industry from high wholesale power costs.

- Decarbonisation -

Electricity is so expensive in the UK largely because more than a quarter of its power still comes from gas, which surged in price after Russia's 2022 invasion of Ukraine.

While wholesale prices have since fallen, they remain elevated.

Under the liberalised electricity market, the last power station switched on to meet demand sets the price for all generators, and in the UK, that station is usually gas-powered.

"In France, nuclear sets the price fairly often and nuclear is cheaper ... so it's not always the same expensive gas that sets the price," Sam Frankhauser, professor of economics and climate change policy at Oxford University, told AFP.

In other countries "there's moments in the day where somebody cheaper sets the price and in the UK, those moments don't exist" as it is almost always a natural gas plant setting the price, he added.

At Encirc's Elton factory, where bottles clatter along the conveyor belts to be filled and labelled, executives say energy prices are inseparable from the push to decarbonise.

By the end of the decade, "we're going to be producing glass bottles that are 80 percent reduced carbon," said Harry.

"The UK managed to decarbonise the grid phenomenally because of the exit of coal," said Gregor Singer, professor at the London School of Economics.

"It's really unfortunate that this gas price shock came now, exactly at that point where you sort of exited coal but you don't quite have enough renewables yet."

"In the medium to long run... it's almost guaranteed that prices are coming down," he said.

W.Tam--ThChM