Energy Crisis Could Halt Industrial Production, Industry Executives Warn | Energy industry


Industry leaders have warned the government that factories across the country could shut down production due to rising energy costs.

Andrew Large, Managing Director of the Confederation of Paper Industries, Gareth Stace, of UK Steel, and other representatives of energy intensive industries attended a meeting with Business Secretary Kwasi Kwarteng to discuss the crisis big gas Friday afternoon.

Then speaking to BBC Radio 4’s PM program, Large described the risk of spillover effects on the supply chain.

“When we spoke with the Secretary of State this afternoon, it was very, very clear in all sectors that there are serious risks of plant shutdowns due to the cost of gas being too high to bear, and under those circumstances there will be a gradual ripple effect through supply chains, throughout manufacturing, retailing and other products. ”

When asked what this would mean for the paper industry, Large said it would hurt profitability.

He added: “Every minute that the machines are not running, every minute that the paper is not produced is a damage to the profitability of the sector and a damage to the potential and the future investment opportunities. “

Speaking to Channel 4 News, Stace argued that the government had not acted to alleviate the crisis, unlike other governments in Europe.

He said: “What we are asking Kwasi Kwarteng today on wholesale prices is simply to intervene, to ease this pressure in the short term, just like in Portugal or Italy. Their governments are already investing billions of euros to help their industries and the UK government has yet to do anything.

When asked what could be the worst-case scenario, Stace said the steel mills could shut down for good.

“The nightmare scenario would be that we were producing less steel in the UK, seeing all this steel that we consume in the UK – and it’s increasing – being satisfied with imports, and once you take out a steel plant, you don’t really bring them back, “he said.” It’s for good. Once it’s done, it’s done. “

The Energy Intensive Users Group (EIUG) said it welcomed the opportunity to meet with the Business Secretary and is happy that it wants to find practical solutions to the challenges members face this year. winter.

EIUG President Dr Richard Leese said: “Our message to the Secretary of State was to take swift and preventive action to prevent the recent production cuts in the fertilizer and steel sectors from happening. breed in other areas this winter.

“EIUG will work with the government to avoid threats to both the production of essential domestic and industrial products, as well as a wide range of supply chains critical to our economy and the leveling of the country.”

EIUG members include trade associations and customer groups representing the UK’s most energy-intensive industries.

In a statement, the Ministry of Business, Energy and Industrial Strategy said of the meeting: “The business secretary stressed that the government remains confident in the security of gas supply this winter. He also highlighted the £ 2bn support program made available to the industry since 2013 to help reduce electricity costs. “

Shadow Business Secretary Ed Miliband said: “This is a crisis in Downing Street.

“Kwasi Kwarteng scrambles to meet industry bosses, but he only speaks words. This chaotic Conservative government got us into this mess in the first place and has no plan to fix it. “

Analysts have predicted that Britons could see their energy bills increase by 30% next year.

Cornwall Insight research agency claimed gas prices were even more volatile and the potential collapse of even more suppliers could push the energy price cap to around £ 1,660 in the summer.

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