Packaging Federation chief executive Dick Searle has said the government needs to wake up to the fact that energy prices are higher in the UK than in mainland Europe.
Searle made the statement in response to comments made by BERR energy minister Malcolm Wicks that average industrial gas and electricity prices in the UK are "broadly in line with average prices in the EU15".
British Glass director general David Workman said that in terms of the domestic market, Wicks was "probably quite correct" to compare competitiveness between the UK and mainland Europe.
However, he pointed out that energy intensive manufacturing firms were exposed to the full impact of movements in the wholesale market where "day ahead" prices are currently at twice the level of last year. The problem is heightened even further for firms trying to buy ahead for next year as prices in early 2009 are doubling again.
As of July 2008, UK gas prices are around 16% higher than in continental Europe and UK electricity prices are around 38% higher than in Germany on a year-ahead basis.
In response to the problem, Workman is calling for the UK's liberalised energy market to be expanded to mainland Europe.
Workman would also like the government to ensure that liquid gas (LNG) terminals are full over the winter period.
He argued that one of the reasons gas prices are so high is that speculators in the city do not believe there will be enough gas in the winter.
A more environmentally contentious option would be a "strategic decision" to switch from gas to coal to generate electricity in the UK.
Source: packagingnews
Searle made the statement in response to comments made by BERR energy minister Malcolm Wicks that average industrial gas and electricity prices in the UK are "broadly in line with average prices in the EU15".
British Glass director general David Workman said that in terms of the domestic market, Wicks was "probably quite correct" to compare competitiveness between the UK and mainland Europe.
However, he pointed out that energy intensive manufacturing firms were exposed to the full impact of movements in the wholesale market where "day ahead" prices are currently at twice the level of last year. The problem is heightened even further for firms trying to buy ahead for next year as prices in early 2009 are doubling again.
As of July 2008, UK gas prices are around 16% higher than in continental Europe and UK electricity prices are around 38% higher than in Germany on a year-ahead basis.
In response to the problem, Workman is calling for the UK's liberalised energy market to be expanded to mainland Europe.
Workman would also like the government to ensure that liquid gas (LNG) terminals are full over the winter period.
He argued that one of the reasons gas prices are so high is that speculators in the city do not believe there will be enough gas in the winter.
A more environmentally contentious option would be a "strategic decision" to switch from gas to coal to generate electricity in the UK.
Source: packagingnews
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