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Tim Morris, head of climate change, Tata Steel Europe at the CBI's energy conference. London, June 2011.
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CBI Energy Conference – supporting energy users
June 2011
Tim MorrisHead of Climate ChangeTata Steel [email protected]+44-207-717-4598
CBI Energy Conference – supporting energy users We take energy very, very seriously
• 2nd largest steel maker in Europe
• 20,000 employed directly in the UK, ~100,000 indirectly
• Global leadership positions in supplying steel to the energy sector
• Recycle, reuse and generate energy
• Major energy consumer
• Major innovator in products and processes for a low carbon economy
• High energy & emissions efficiency vs global competitors
• Energy and emissions targets core in vision, monitoring and reporting
CBI Energy Conference – supporting energy users UK industry bearing a significant cost
We’re starting behind… …and it looks like it might get worse
0
100
200
300
400
500
600
2010 2013 2020
Scenario for Tata Steel UK-only electricity ‘green costs’ exposure**(Aggregate spend, rebased to 2010)
Average UK, German and French wholesale power prices*(£/MWh)
£20
£25
£30
£35
£40
£45
UK Germany France
17% 14%
5x
Sources: Reuters, Waters Wye study for EIUG / TUC, March 2011
* Average daily year ahead baseload price, February 2003 to date, translated at daily £/€ FX rate** UK only green costs cover estimated impacts of RO / FITs, CCL including rebate, CCS/EPS, Capacity market costs, CFP impact. Excludes EU ETS impact and additional transport & distribution investment costs
CBI Energy Conference – supporting energy users Where should the policy priorities be?
Shaping the demand side landscape
Investing in infrastructure
• Procurement policies & regulatory standards• Labelling?• Supporting UK supply chains – offshoring CO2 doesn’t
solve the global problem!
• Balanced, cost effective energy mix• Alternatives for providing ‘certainty’ e.g. offtake consortium • Right approach to demand response and market signals • EII strategy – end of the year?
• Gas storage• Industrial as well as power sector CCS demonstration and
infrastructure• Human and intellectual capital – skills, education, R&D• Innovative financing and structuring (GIB?)
Competitive cost of energy
There is a winning solution for the UK with foundation industries having a crucial role