Iron and Steel: Energy

(asked on 14th October 2019) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, if she will introduce (a) discounts on energy network costs, (b) a Capacity Market Levy exemption, (c) 100 per cent compensation for the indirect costs of carbon and (d) other substantive measures to lower electricity prices for the UK steel sector.


Answered by
Nadhim Zahawi Portrait
Nadhim Zahawi
This question was answered on 21st October 2019

The Government is committed to minimising energy costs for businesses to ensure our economy remains strong and competitive.

Network charging is a matter for Ofgem as the independent regulator, and we continue to support Ofgem to enable all interested parties to engage in its work to reform network charging arrangements.

Our assessment is that both exempting electricity intensive industries from Capacity Market costs and providing 100% compensation for the indirect costs of carbon would not be compatible with current State aid guidelines. The Capacity Market will ensure that all energy consumers – including the steel sector – benefit from a secure and affordable supply of electricity. Eligible businesses in the steel sector already benefit from the maximum rate of compensation for the indirect costs of carbon that is allowable under current State aid guidelines. The £315 million Industrial Energy Transformation Fund will also support businesses with high energy use to cut their bills and emissions.

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