Press release: Opportunities worth £3.8 billion identified for UK steel producers

  • government publishes independent research into high value opportunities for the UK steel industry
  • details of upcoming steel requirements for infrastructure projects also published
  • research identified market opportunities worth up to £3.8 billion a year for UK steel producers by 2030 and 3 million tonnes of steel to be used in government in infrastructure projects by 2021

The government has today (15 December 2017) published independent research into the future capability and capacity of the UK’s steel industry. Through the ambitious, modern Industrial Strategy, the government is determined to set out a long-term plan for the UK steel sector.

Minister for Climate Change and Industry Claire Perry said:

Through our modern Industrial Strategy, the government has been clear that we will do everything we can to support our steel industry. The capability and capacity report identifies high value opportunities for the sector worth nearly £4 billion.

The steel pipeline shows our commitment to using UK steel for infrastructure projects and we want UK companies big and small to be strong competitors for government contracts.

The study has identified real opportunities in new and existing markets that could be worth as much as £3.8 billion a year by 2030. The report also recognises the barriers that the sector is working to overcome. The government has already made significant progress to tackle global over-capacity in the steel market. In November, Business Secretary Greg Clark attended the G20 Global Forum on Steel Excess Capacity in Berlin, which unanimously agreed important policy principles and recommendations towards challenging over-capacity. The G20 Global Forum now has a mandate to ensure that those countries that offer unfair subsidies are properly addressed.

General Secretary of Community the steelworkers’ union Roy Rickhuss said:

Community welcomes the ‘Future Capacities and Capabilities’ report. This will help us all better understand the opportunities and challenges facing the UK steel industry.

We also welcome the new procurement pipeline, which will assist steel companies in planning and investing for the future.

The UK steel industry has enormous potential, and we urge government and steel companies to continue working with the unions to secure a sustainable future for UK steelmaking.

Crucial to this future will be the successful conclusion of a ‘sector deal’ for our industry, which will unlock investment and safeguard thousands of jobs across the UK.

Last year government published a pipeline of steel procurement and today an updated, extended version has been released. The publication honours a pledge government made to annually publish steel procurement data. This information shows how government plans to use 3 million tonnes of UK steel in infrastructure projects in the next 5 years. The steel will be used across the UK in projects such as High Speed 2 (HS2) and the construction of Hinkley Point C. This pipeline will allow steel companies to better plan for the long term, helping large and small manufacturers to compete effectively for government contracts.

This steel-specific pipeline complements the 2017 National Infrastructure and Construction Pipeline, which sets out over £600 billion worth of planned private and public investment.

From roads to rail, defence to nuclear, the pipeline shows that central government is using enough steel to build the equivalent of 173 Wembley stadiums – or 3 million tonnes worth of steel across over 50 separate projects over the next 5 years.

Notes to editors

  1. Major procurement projects are likely to include, but not limited to:

    • infrastructure such as rail and roads
    • construction such as the building and refurbishment of prisons, bridges and schools
    • flood defences
    • defence related projects
    • energy related projects for example new nuclear technology
    • science and research facilities
  2. The independent research was commissioned by the UK Steel Council in June 2016 and carried out by a Grant Thornton led consortium, including Hatch Consulting and the Materials Processing Institute. The consortium received support from a steering board containing representatives from the UK steel sector, including:

    • British Steel
    • Celsa Steel UK
    • Liberty Steel
    • Tata Steel UK
    • UK Steel (the trade association for the UK steel industry)

The report provides quantitative forecasts for UK steel demand across products and consuming sectors out to 2030 and was informed by a detailed programme of 100 interviews across the UK steel supply chain. It also contains analysis on:

  • historic trends in UK steel supply and demand
  • future opportunities for the UK steel industry in new and existing markets
  • the barriers to the UK steel industry accessing these opportunities
  • how far the capacity and capability of the sector is aligned to the opportunity

Guidance: Steel public procurement pipeline

Contains information on the government’s expected steel requirements in England. This information will make it easier for UK steel producers to plan and bid for government contracts. The data shows how the government plans to use 3 million tonnes of steel in the next 5 years on infrastructure projects such as:

  • High Speed 2 (HS2)
  • the construction of Hinkley Point
  • the maintenance and upgrading of the UK’s motorway network

This publication lists only projects involving a significant quantity of steel. For a wider assessment of planned investment in infrastructure across the public and private sectors, please see the National Infrastructure and Construction Pipeline.

Research and analysis: UK steel industry: future market opportunities

Sets out research findings on future trends in UK steel demand and the opportunities these present for UK steel producers. The report provides quantitative forecasts for UK steel demand across products and consuming sectors out to 2030 and contains analysis on:

  • historic trends in UK steel supply and demand
  • future opportunities for the UK steel industry in new and existing markets
  • the barriers to the UK steel industry accessing these opportunities
  • how far the capacity and capability of the sector is aligned to the opportunity

Plans to undertake new research on the UK steel sector were agreed at the second meeting of the Steel Council in 2016. The research was informed by a detailed programme of 100 interviews across the UK steel supply chain. It was conducted by a Grant Thornton UK LLP-led consortium including Hatch Consulting and the Materials Processing Institute. The consortium received support from a steering board containing representatives from the UK steel sector.

Press release: Boost to remote island wind projects as consultation launched

A consultation has been launched today (15 December 2017), including proposals to enable remote island wind projects to apply for a Contract for Difference (CfD) in the next competitive auction for less established renewable technologies (subject to state aid approval).

Wind projects on remote islands (such as Western Isles, Orkney and Shetland) have great potential due to the strong winds on the islands and the opportunity to bring employment and benefit local supply chains. However, they also face higher costs due to their location and transmission requirements, which set them apart from onshore wind projects elsewhere in Great Britain.

The Government announced up to £557 million for future auctions in its Clean Growth Strategy and intends for these changes to be implemented, so that island wind projects can compete in the next auction, planned for spring 2019. The consultation will also seek views on how island communities can benefit from these projects.

The last auction proved the benefits of the Government’s competitive approach and saw the cost of new offshore wind fall by as much as 50%.

If a sufficient number of projects are successful it should facilitate the construction of new transmission links, which could deliver a range of wider and longer term benefits and cost savings to the renewables industry and to the island economies.

UK Energy Minister Richard Harrington said:

We’ve placed clean growth at the heart of our new Industrial Strategy. We are cutting emissions while keeping costs down for consumers, creating high value jobs and growing the economy.

We are delivering on our commitment to support remote island wind projects, which have the potential to benefit local communities.

UK Government Minister for Scotland Lord Duncan said:

Wind projects in the remote islands of Scotland have the potential to generate substantial amounts of electricity and cut emissions, supporting economic growth and delivering lasting benefits for communities.

Enabling these projects to compete in future auctions will reinforce the UK’s position as a world leader in renewable generation, as well as providing Scottish jobs in any projects supported.

I urge local communities, developers and other stakeholders to work together to ensure that such projects deliver lasting benefits to the islands.

A 2013 report for the UK and Scottish governments concluded that wind projects on the Western Isles, Orkney and Shetland could supply around 3% of the UK’s total electricity demand.

More than 750MW of wind projects with planning consent on these islands could be eligible for the next auction.

The consultation also asks for views on other changes the government is considering making to the Contracts for Difference (CfD) scheme, to enable it to continue to support new generation and provide best value for bill payers in coming years.

These changes include proposals to increase the efficiency requirements for Combined Heat and Power (CHP) and Advanced Conversion Technologies (ACT) as technology improves. This ensures that only sufficiently advanced and efficient plants are awarded subsidy.

Changes are also proposed to ensure that costs of future projects can be accurately forecasted and that future schemes continue to drive carbon emission reductions.

Notes to editors:

  1. The consultation opened on 15 December 2017 and runs until 9 March 2018.
  2. Government aims to support the development of onshore wind projects on remote islands, where they benefit local communities. This consultation sets out a proposed definition of remote islands wind, as a new technology that can compete in future auctions for ‘less established’ technologies (also known as ‘Pot 2’). The proposal is subject to state aid approval.

Open consultation: Contracts for Difference (CfD): proposed amendments to the scheme

We’re seeking views on proposed amendments the Contracts for Difference (CfD) scheme, which provides support for new low carbon electricity generation projects, to enable it to continue to support new generation and provide best value for bill payers in coming years.

Government aims to support the development of onshore wind projects on remote islands, where they benefit local communities. This consultation sets out a proposed definition of remote islands wind, as a new technology that can compete in future auctions for ‘less established’ technologies. An impact assessment is published regarding this proposal.

The responses to the Call for Evidence on fuelled technologies in the CfD scheme, published in November 2016, have informed the development of a number of policy changes relating to fuelled technologies. This consultation proposes:

  • refinements in relation to Advanced Conversion Technologies, to ensure that only more innovative and efficient plants are awarded subsidy
  • changes to the overall efficiency requirements for Combined Heat and Power, to ensure that CfD supported plants are of a suitably high overall efficiency. An impact assessment is being published regarding this proposal
  • updated greenhouse gas emissions criteria that new projects using solid and gaseous biomass as feedstock will have to comply with.

The consultation also makes new proposals to facilitate more accurate forecasting of budget spend, and invites views on various other potential changes to the detailed terms of new CfD contracts.

Promotional material: UK Industrial Strategy: a leading destination to invest and grow

The UK’s Industrial Strategy sets out how we will invest in the skills, industries and infrastructure of the future and support our citizens and businesses to embrace and benefit from the opportunities of technological change.

Building on our strengths, the strategy ensures we remain one of the world’s most open economies by:

  • welcoming investment from overseas
  • participating in global supply chains
  • buying and selling goods and services from all over the world
  • continuing our active participation in the international community

Transparency data: BEIS: ministerial gifts, hospitality, travel and meetings, July to September 2017

The Department for Business, Energy and Industrial Strategy (BEIS) publishes details of ministers’ meetings with external organisations, gifts (given and received), hospitality and overseas travel on a quarterly basis.

This data is also available on data.gov.uk: