High energy prices threaten the future of the UK steel industry

CONTINUED high energy prices could signal the death knell for the UK’s steelmaking industry, according to steel researchers.

In a bid for greener steelmaking, the industry is pinning its hopes on a move from blast furnace technology to electric arc furnaces (EAFs), with Tata Steel recently closing its final blast furnace in Port Talbot, Wales.

However, the University of Swansea’s Richard Curry and Enrico Andreoli have warned that the energy costs associated with running EAFs for steelmaking currently make them unviable.

Curry, the programme manager for SUSTAIN, a university-led decarbonising steel project, said: “There are arc furnace plants already in the UK and they have struggled with energy prices, where they have had to switch off when the prices have been too high.”

To prevent the manufacture of steel moving overseas, Curry recommends the UK bolster its assets in scrap metal and divert more for steelmaking instead of exporting it.

He said: “We export eight or nine million tonnes a year of scrap annually that we could be using to produce steel.”

And Andreoli, the head of the Department of Chemical Engineering at Swansea University, said that by using carbon capture and utilisation (CCU), that scrap could form part of a circular economy.

He said: “The steel company that makes the steel from scrap will generate CO2 that can be captured and processed at a chemical company with the expertise to make new products.”

UK steelmakers pay around £66 (US$86)/MWh of electricity, compared to £43/MWh in France and £50/MWh in Germany, resulting in bills £37-50m higher than their European competitors, according to British Steel.

Curry says that the government should invest more in the steel industry and bring prices down so that it can be globally competitive. He said: “Energy prices can only come down if we invest and have a surplus of energy.”