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British Rubber & Polyurethane Products Association

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Energy Matters

Posted on 27 February 2015

Electricity costs for industrial consumers in the UK are due to rise sharply by 2020 as a result of electricity market reform and the renewables obligation. These two measures alone could raise costs by some £15 per MWh – far higher than the increase in costs likely from comparable measures in other major European countries.

The scheme that the Department for Business had planned to introduce for compensating intensive electricity users for these costs, from which rubber compounders could have benefited, failed to meet EU state aid requirements because the Commission had decided to tighten up the eligibility criteria for such schemes. BIS has been working on a modified scheme and had proposed that rubber compounding be included if it could be demonstrated that the sector could meet the new criteria for electricity intensiveness. BRPPA had sought data from all significant compounders in the UK but the returns received indicated that the sector was unlikely to meet the criteria. BRPPA has not therefore applied for inclusion in the scheme. It is still however keeping in touch with BIS in case less stringent criteria are introduced.

In the meantime it looks as if concerns expressed a few months about the availability of electricity generating capacity being insufficient to meet peak demand have been allayed. But concerns about the position next winter remain. Watch this space!