Heavy electricity users such as steel companies to save £100M a year in energy costs thanks to new regulations.
The construction industry is set to benefit from new measures that have been introduced which will save heavy electricity users like steel and cement companies £100M a year in energy costs.
The government expects the new measures to benefit over 130 eligible companies across the UK, exempting them from a proportion of the costs of the Contracts for Difference scheme, which is designed to encourage investment in low-carbon energy generation.
Through a competitive process, Contracts for Difference are won, which drives down costs and guarantees companies a certain price for the low-carbon electricity they produce for a set number of years. It helps companies to attract investment and kick-start projects, with the support and certainty they need to be successful.
The costs of funding the scheme are recovered through a levy on energy suppliers which is passed on to domestic and business energy bills. Although this only makes up a minor part of most electricity bills, it has a more significant impact on industries with a high usage of electricity.
The Industrial Strategy green paper highlights the government’s commitment to minimising business costs and to commissioning a review of the opportunities to reduce the cost of achieving decarbonisation goals in the power and industrial sectors.
Energy Minister Jesse Norman said: “We want the UK to be one of the best places in the world to build and grow a business, and that means creating the right conditions for companies to thrive and succeed.
“These industries are worth £52Bn to the UK economy, support 600,000 jobs and produce essential products that people use every day. That is why we have taken this action to support them.”
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