Soaring energy prices in the UK are developing a great concern for the manufacturing sector in the region, according to media reports. Producers of steel, paper, glass, cement, ceramics and chemicals could shut down their plants as a result of increasing production costs.
The growing concern among different stakeholders is genuine given soaring natural gas prices brought Britain’s food industry to the brink of shutting down last month.
In this regard, industry group UK Steel told the media, “It is expected that the UK will continue to experience high and frequent peaks in electricity prices leading to further production stoppages, damages to plants and long-term injury to the UK steel sector.”
According to them, UK wholesale electricity prices surged from £50 per megawatt hour in April to as much as £2,500 per megawatt hour in September.
Recently, UK-based energy consultant Cornwall Insight forecasted that the energy price cap, which was set at a record £1,277, will be increased further in spring 2022 if the energy crisis continues.
“With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021, and a new level for the default tariff cap, the British energy market remains on edge for fresh volatility and further consolidation,” said Craig Lowrey, senior consultant at Cornwall Insight.
According to media reports, the increase in the cap, which was announced in October last year, led to roughly 15 million households facing a 12 percent rise in energy bills in the UK.