The Japan Times - UK manufacturers struggle under sky-high energy bills

EUR -
AED 4.068977
AFN 72.017668
ALL 90.66125
AMD 404.582645
ANG 1.983009
AOA 1017.106924
ARS 1711.217854
AUD 1.620961
AWG 1.994327
AZN 1.879515
BAM 1.952644
BBD 2.255947
BDT 139.634328
BGN 1.936526
BHD 0.422557
BIF 3350.702262
BMD 1.107959
BND 1.431921
BOB 13.28403
BRL 6.187177
BSD 1.120086
BTN 105.264376
BWP 15.366483
BYN 3.353683
BYR 21716.003406
BZD 2.252663
CAD 1.579778
CDF 2564.925957
CHF 0.922836
CLF 0.02769
CLP 1089.800121
CNY 7.390477
CNH 7.387818
COP 3635.103856
CRC 506.629217
CUC 1.107959
CUP 26.879558
CVE 110.097002
CZK 24.389544
DJF 199.454751
DKK 7.475441
DOP 67.936642
DZD 151.643051
EGP 59.351062
ERN 16.61939
ETB 182.305242
FJD 2.514178
FKP 0.834328
GBP 0.835684
GEL 2.878618
GGP 0.834328
GHS 13.116282
GIP 0.834328
GMD 81.988419
GNF 9922.903356
GTQ 8.55894
GYD 234.707155
HKD 8.68931
HNL 30.108194
HRK 7.499788
HTG 146.816634
HUF 364.88443
IDR 20218.042354
ILS 3.52125
IMP 0.834328
INR 103.834292
IQD 1697.855989
IRR 2111853.631941
ISK 136.58921
JEP 0.834328
JMD 177.768741
JOD 0.78558
JPY 177.019734
KES 143.956848
KGS 96.890603
KHR 4568.050196
KMF 489.718201
KPW 997.163379
KRW 1471.597164
KWD 0.344863
KYD 0.933292
KZT 500.021883
LAK 25211.870367
LBP 100302.447826
LKR 372.243671
LRD 190.409453
LSL 18.362928
LTL 3.271516
LVL 0.670193
LYD 7.180012
MAD 10.926274
MDL 20.12756
MGA 5068.243462
MKD 61.549131
MMK 2326.409305
MNT 3994.086851
MOP 9.049275
MRU 45.184257
MUR 52.484026
MVR 17.06754
MWK 1942.227577
MXN 20.641058
MYR 4.523238
MZN 70.799652
NAD 18.361026
NGN 1491.002605
NIO 41.217292
NOK 10.602729
NPR 168.423761
NZD 1.995396
OMR 0.426008
PAB 1.120116
PEN 3.816931
PGK 5.030347
PHP 70.490566
PKR 307.540734
PLN 4.411122
PYG 6914.41804
QAR 4.08297
RON 5.344688
RSD 117.594372
RUB 92.0462
RWF 1657.171311
SAR 4.179459
SBD 8.964219
SCR 15.406306
SDG 666.435918
SEK 11.060259
SGD 1.423872
SHP 0.830212
SLE 25.386812
SLL 23233.358618
SOS 640.123232
SRD 41.710258
STD 22932.521738
STN 24.462782
SVC 9.800161
SYP 14405.687216
SZL 18.367889
THB 37.40246
TJS 10.293493
TMT 3.877858
TND 3.338206
TOP 2.6677
TRY 55.680388
TTD 7.595724
TWD 36.548214
TZS 2945.935408
UAH 50.944234
UGX 4570.129529
USD 1.107959
UYU 45.320845
UZS 13411.325117
VES 997.706879
VND 28462.921913
VUV 132.892923
WST 3.088768
XAF 655.957
XAG 0.021513
XAU 0.000278478306
XCD 2.994315
XCG 2.018438
XDR 0.783385
XOF 655.957
XPF 119.331742
YER 261.973167
ZAR 18.412922
ZMK 9972.967302
ZMW 22.821177
ZWL 356.762461
SSP 6411.232874
MXV 2.31862
  • RYCEF

    0.1000

    19.81

    +0.5%

  • VOD

    -0.2500

    16.33

    -1.53%

  • CMSC

    -0.2800

    20.12

    -1.39%

  • RBGPF

    -2.0000

    65

    -3.08%

  • RIO

    -0.2500

    94.16

    -0.27%

  • BTI

    -1.2000

    54.85

    -2.19%

  • NGG

    -0.3000

    74.94

    -0.4%

  • GSK

    -0.3500

    49.35

    -0.71%

  • BCE

    -0.4200

    20.14

    -2.09%

  • CMSD

    -0.3400

    19.93

    -1.71%

  • BP

    -0.9100

    43.52

    -2.09%

  • RELX

    0.1700

    33.24

    +0.51%

  • BCC

    -0.6200

    75.97

    -0.82%

  • AZN

    -1.9400

    164.21

    -1.18%

  • JRI

    0.0000

    10.77

    0%

UK manufacturers struggle under sky-high energy bills
UK manufacturers struggle under sky-high energy bills / Photo: Paul ELLIS - 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.

T.Ueda--JT