Energy Bill: Tata closures a 'weather' warning

Tata Steel’s decision to axe 900 jobs in the UK is part of a plan to turn the company into an “all-weather” steel producer, the company’s management has stated.

A key test of the governments’s Energy Bill, therefore, will be whether process manufacturers, such as Tata, depart for sunnier, ie more industry-friendly, parts of the world.

As Energy Advice Line (EAL) (see story) warns, many businesses will struggle to cope with a possible three-fold increase in charges to pay for the government’s environmental reforms.

Firms would be pushed to the financial brink by the new measures, believes Julian Morgan, EAL’s managing director – noting that the government is to allow energy firms to triple the amount they add to customers’ energy bills to pay for renewable power, nuclear and other green measures.

This means the total amount energy suppliers will be able to add to domestic and business electricity bills will rise from £2.35 billion this year to nearly £10 billion by 2020.

However, a government statement issued alongside the Energy Bill, indicated that energy-intensive industries would be exempt from additional costs arising from measures to encourage investment in new low-carbon production.

“Decarbonisation should not mean deindustrialisation”, explained energy minister Ed Davey. “The transition to the low carbon economy will depend on products made by energy intensive industries … for example steel, cement and high-tech textiles.”

The details of this exemption will be closely scrutinised by process manufacturers, who need to know that they can remain competitive in the UK’s low-carbon economy.

After all, it’s not our weather that’s keeping them here.