UK steelmakers face a three-year high electricity price gap with France

British steelmakers are paying a growing premium for electricity compared with European rivals, reaching its highest level against France in three years. The rise followed a surge in global gas prices after the US-Israeli war on Iran and adds pressure to an industry that relies on electricity for cleaner steelmaking.

UK Steel’s analysis puts the gap with France at almost £30 per megawatt hour, up from £18 last year; it was £153 in 2022 during the gas-market crisis after Russia invaded Ukraine. The gap with Germany narrowed slightly to about £12. France relies mainly on nuclear power to set electricity prices, while UK prices are closely tied to gas. UK Steel proposes a price cap it estimates would cost £51m a year, while the government says it is cutting bills by up to 25% for more than 10,000 manufacturing businesses.