London, 7th October 2021: The Energy Intensive Users Group (EIUG) says National Grid’s Winter Outlook Report and the warning of a greater risk of blackouts only emphasizes the need for Government and Ofgem to implement emergency measures this winter.
The Energy Intensive Users’ Group (EIUG) considers that today’s report does not provide any comfort or certainty for UK Energy Intensive Industries (UK EIIs) that this winter’s energy supplies will be both affordable and available – urgent action is still required from Government and Ofgem.
EIUG Chair, Dr Richard Leese, pointed out that the Winter Outlook report makes it clear that margins will be very tight this winter, contrasting it with the need for energy intensive industries to have reliable and affordable energy this winter:
‘The issue is not just whether the supply of gas and electricity will be available but also one of price. Energy intensive industries could simply be priced out of the market. This danger is massively heightened given this winter’s global energy outlook plus competition from Europe and other parts of the world for gas, including LNG.
In the short term, we are calling on the Government and Ofgem to provide us with emergency measures to ensure we have energy that is reliable, not prone to emergency interruption, and available at affordable prices that enable our members to continue operating this winter. Longer term, we are seeking a fundamental review of the uncompetitive bundle of gas and electricity decarbonisation oncosts we face, that damage our ability to compete internationally.
Referring to September’s energy price increases that resulted in the cessation and curtailment of production in the fertiliser and steel sectors respectively1, Dr Leese continued:‘UK EIIs desperately want to avoid any widening of the impact we saw in September, where consumers, industry and supply chains all felt the disruption. Energy intensive industries in the UK are operating under the combined pressure of gas, electricity and carbon dioxide emission costs which are raising operating costs and raw material prices. EIUG put forward this week a series of measures that would help us continue operating both safely and competitively this winter. We are looking to Government and Ofgem for the swift and effective implementation of those measures.’
Why we matter:
EIUG members include the steel, fertiliser, paper, chemicals, pharmaceuticals, cement, lime, minerals, ceramics, glass and industrial gases sectors. They manufacture essential daily domestic and industrial products, providing 200,000 direct jobs and indirectly supporting another 800,000.
EIUG Contact: Amrik Bal, Director Energy Intensive Users’ Group (BalA@eiug.org.uk)
Notes to editors:
1. The EIUG represents the UK’s Energy Intensive Industries (EIIs) including manufacturers of steel, chemicals, fertilisers, paper, glass, cement, lime, ceramics, and industrial gases. EIUG members produce materials which are essential inputs to UK manufacturing supply chains, including materials that support climate solutions in the energy, transport, construction, agriculture, and household sectors. They add an annual contribution of £38bn to UK GDP, supporting 200,000 jobs directly and 800,000 jobs indirectly around the country.
2. These foundation industries are both energy and trade intensive – remaining located & continuing to invest in the UK and competing globally requires secure, internationally competitive energy supplies and freedom to export without tariff barriers. However, inward investment, growth and competitiveness have been hampered for years by UK energy costs higher than those of international competitors. In some cases, investment, economic activity & jobs have relocated abroad, leading to a subsequent increase in imports.
3. An EIUG press release dated 5th October published a series of measures aimed at reducing UK EIIs’ energy costs this winter and their safe response to any emergency interruptions in energy supply.