Groups are generating their own power or doing direct deals with renewables developers. On the roofs of a wastewater treatment plant on Teesside in the north-east of England, 943 solar panels serve as an example of how a growing number of UK businesses are taking direct action to cut their energy bills. Some are generating their own power on site, others signing long-term supply agreements with renewable energy developers. In extreme cases, some are trying to move “off grid” entirely. UK industrial electricity prices are among the highest in Europe and a longstanding bugbear of British industry, especially for intensive users such as steel, cement and chemicals manufacturers. Prices are higher partly because some other countries shield industry from costs such as funding renewable energy subsidies and other environmental charges, adding more to household bills instead. But higher wholesale and network costs in the UK are also a significant factor. Ministers have promised to reduce energy costs for business as part of the forthcoming “industrial strategy” and some of the most energy-intensive sectors, such as the steel industry, have already been given help. Even so, many companies are taking matters into their own hands. A recent survey of industrial companies by PwC suggested 17 per cent plan to generate all, or almost all, of their own electricity within five years. A further 45 per cent want to reduce their dependence on the grid by producing some power on site. Centrica has installed a 3MWh battery storage scheme for Gateshead Council, which has developed its own energy project to provide heat and electricity to public buildings via a network of underground pipes and “private wire” electricity cables. The council plans to supply local businesses, too.
FT 5th Nov 2017 read more »