The price of electricity for manufacturers in the UK is very expensive.
Speaking to ELN at the Energy Live 2015 conference, Chris Webb Head of EMEA Energy Management at Linde Gas said the government should make energy prices more competitive with prices in other EU countries.
He added: “What troubles us is not so much the energy mix but how the costs of supporting the renewable part of that energy mix are distributed. We find that – and this is Eurostat numbers – manufacturers in Britain are paying anything up to 50% more for their electricity than they are in other countries within Europe.
“That additional burden is essentially about tax. So if the government wants to retain not only current jobs in manufacturing but wants to invite and encourage new investment in manufacturing into the UK, it has to make UK energy prices broadly comparable with energy prices in Germany or France or Sweden.”
According to Mr Webb prices for manufacturing electricity could be cheaper by redistributing tax charges and eliminating the carbon price.
He added: “It’s a question of redistributing how the taxes are charged. The state aid guidelines on environmental energy allow national governments a fair amount of discretion and to be able to reduce those charges by about 80%. So what we think are obviously ROs and FiTs and CfDs, they could reduce that for the manufacturing industry.
“Yet the big thing they could do is to take away the carbon floor price. That’s a unilateral additional charge that manufacturers in the UK have to pay and none of our global competitors pay anything of the kind so that’s a big disadvantage to global manufacturing operations based in this country.”