Ofgem’s Targeted Charging Review is seeking to ensure all parties connected to the electricity network make a fair contribution to its fixed costs. This is consistent with Government’s views on the importance of an energy system that discourages free riding and ensures a fair distribution of costs, with solutions rewarded where they contribute to reduced system costs.

Network charging is a matter for Ofgem as the independent regulator, and decisions on its review are for it to make. The analysis published by Ofgem is available at https://www.ofgem.gov.uk/electricity/transmission-networks/charging/targeted-charging-review-significant-code-review, Ofgem expects total consumer costs to reduce as a result of its proposals. Ofgem has yet to take its final decisions on the review - it is currently considering the views and evidence provided in response to its most recent consultation.

The decision to ensure that the Department's electricity will be supplied solely from renewable resources was made in March 2019.

We recognise that industrial consumers currently pay higher electricity prices than elsewhere in the EU. No specific assessment has been made on the impact of electricity price differential on UK steel sector’s competitiveness.

The ability of our steel industry to compete globally and across Europe is a priority for this Government. We therefore provide electricity cost compensation and exemption support to maintain the UK’s reputation as an attractive location for these businesses.

We have a number of funds available to energy intensive industries, including steel, to help them increase energy efficiency and transition to a low carbon future. These funds include the £315 million Industrial Energy Transformation Fund, the Industrial Heat Recovery Support Programme and the recently announced £250 million Clean Steel Fund.

The ability of our steel industry to compete globally and across Europe is a priority for this Government. We therefore provide electricity cost compensation and exemption support to maintain the UK’s reputation as an attractive location for these businesses.

In 2017, the Department commissioned independent research identifying high value opportunities for UK steel, worth up to £3.8 billion a year by 2030(1). To access these opportunities, as well as match funding grants for R&D, significant investment will need to be made by the sector.

We have a number of funds available to energy intensive industries, including steel, to help them increase energy efficiency and transition to a low carbon future. These funds include the £315 million Industrial Energy Transformation Fund, the Industrial Heat Recovery Support Programme and the recently announced £250 million Clean Steel Fund.

1. Future capacities and capabilities of the UK steel industry: https://www.gov.uk/government/publications/uk-steel-industry-future-market-opportunities

The Government is committed to minimising energy costs for businesses to ensure our economy remains strong and competitive. The ability of our steel industry to compete globally and across Europe is a priority for this Government.

We have taken steps to reduce the cumulative impact of energy and climate change policies on industrial electricity prices for the steel sector and other key energy intensive industries. This includes paying over £300m compensation to the steel sector since 2013.

We have a number of funds available to energy intensive industries, including steel, to help them increase energy efficiency and transition to a low carbon future. These funds include the £315 million Industrial Energy Transformation Fund, the Industrial Heat Recovery Support Programme and the recently announced £250 million Clean Steel Fund.

We have not made a specific assessment of the effect of higher electricity prices on the steel industry. The ability of our steel industry to compete globally and across Europe is a priority for this Government. We therefore provide electricity cost compensation and exemption support to maintain the UK’s reputation as an attractive location for these businesses. We also have a number of funds available, or in development, that support energy intensive industries, including steel, to help them increase energy efficiency and transition to a low carbon future. These funds include the £315 million Industrial Energy Transformation Fund, the Industrial Heat Recovery Support Programme and the recently announced £250 million Clean Steel Fund.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

Between 2005 and 2010, industrial electricity prices rose by 64 per cent. Including taxes, industrial electricity prices rose from 4.77 pence per kWh in 2005 to 7.84 pence per kWh in 2010 while between 2010 and 2017, industrial electricity prices (including taxes) have risen from 7.84 to 9.79 pence per kWh.

The steel sector has received more than £291 million in compensation since 2013 to make energy costs more competitive [accurate as at 31/05/19], including over £53 million during 2018. Last year we announced the Industrial Energy Transformation Fund worth up to £315 million to support businesses with high energy use to transition to a low carbon future and to cut their bills through increased energy efficiency.

We have taken a range of actions to reduce the cost of electricity for energy intensive industries, including a package of relief worth over £850 million since 2013, supplemented by the announcement of a £315 million Industrial Energy Transformation Fund at the Budget.

As my rt. hon. Friend the Secretary of State for Business, Energy and Industrial Strategy made clear in his speech of 15th November 2018 (available on gov.uk), a full exemption from all historic policy costs for all industry would add around £1.5 billion to household bills by 2020, and any future decisions must take full account of the impacts on other bill payers.

The Government has taken a range of actions to reduce the cost of energy – including protecting 11 million households from poor value energy tariffs through the introduction of a price cap, and providing a package of relief for energy intensive industries worth over £850 million since 2013, supplemented by the announcement of a £315 million Industrial Energy Transformation Scheme at the Budget.

In his speech of 15th November (available on gov.uk), my rt. hon. Friend the Secretary of State for Business, Energy and Industrial Strategy set out his strategic approach to ensure consumers get a fair deal for their energy, while opening up the market to competition.

The Government is committed to minimising energy costs for businesses to ensure our economy remains strong and competitive. The ability for our industries to be able to compete across Europe and globally is a priority for this Government.

As set out in the recent energy speech by the Secretary of State for Business, Energy and Industrial Strategy, the Government recognises that industrial electricity prices are currently higher than those in some competitor economies. The principles set out in the speech are intended to deliver policies that will lower the costs of the electricity system permanently and further details will be set out in a White Paper next year.

At the same time as reducing the costs of electricity production, the Government wants to increase industrial energy efficiency. As announced in the Budget on 29 October 2018, £315 million is being provided for an Industrial Energy Transformation Fund to support industrial energy efficiency and decarbonisation projects to bring energy costs down for vital industries, including the steel sector. Furthermore, our Industrial Heat Recovery Support Programme is now open to applications for feasibility and/or preliminary engineering studies. We will publish our response to the consultation on widening eligibility for the exemption schemes for energy intensive industries in due course.

Meanwhile, we are continuing to reduce the cumulative impact of energy and climate change policies on industrial electricity prices for key energy intensive industries. This includes a package of relief for these industries worth over £850 million since 2013, of which £271m has been provided to the steel sector in compensation to the steel sector as of 30 November 2018.

We welcome the recent report by UK Steel regarding high electricity prices and will give its recommendations careful consideration.

The Department has made no such assessment. The current electricity market regime enables large users of electricity to negotiate rates which reflect their usage and the time at which they use it. There is a competitive market for ancillary services in which large energy users can also participate including demand side measures. These are commercial decisions for individual companies.