Rising energy cost impacts firms

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The escalating cost and diminishing supply of electricity is in danger of making UK manufacturers uncompetitive, according to Yorkshire’s manufacturing chiefs.

Speaking at an energy conference in Sheffield today, Master Cutler Tony Pedder said high energy users, such as Tata Steel, were having to switch off production at peak times of the day to avoid paying excessive electricity charges.

The number of times workers cease production during the day has risen to around 30 times a year and fears are rising that it could climb even further in the face of uncertainty over Government energy policy.

Mr Pedder said: “We’ve had a relatively mild winter but we’re still grappling with the issues of the very tight capacity and demand balance. That bit is tighter than it has been for some time because we’ve been turning off some coal-fired power stations to meet our climate change obligations.

“Some say the gap between what’s available and demand is as low as two per cent. That leads to the issue of having to load manage. For me it seems absolutely crazy in 2014 for a major economy that we’ve got big manufacturing industries like Tata Steel who are having to manage their production minute by minute, day by day because of energy pricing and availability.”

Terry Scuoler, chief executive of manufacturers organisation EEF, added: “Quite clearly we want the Government to flatten their trajectory of electricity price rises and a freeze on what we call the carbon price floor. We want the compensation package for energy intensive users extended to 2020 and, financially, we want it to include a measurable part of what we call the renewables obligation.”