A chief exec. of one of the UK’s largest manufacturers has gone on record to warn the current UK Government that rising power costs and a lack of clarity around net zero is threatening the future of the British manufacturing and distribution sectors.

Miles Roberts, chief executive for paper and packing organisation, DS Smith, recently said that the UK’s high cost of electricity, when compared to mainland Europe or the US, was damaging how competitive his company could be on a global scale.   

He then went on to criticise a lack of clarity from the new Government’s plans to overhaul the national power grid for the net zero era, warning that the ongoing situation would threaten future investments in his company’s paper mill in Kent. 

“For us, infrastructure, distribution and energy are big costs. And in the UK, energy costs for heavy users are significantly ahead of those costs in Europe and very, very substantially ahead of our competitors in the US. So when we’re all having this debate about the future of Britain’s energy and the transition to green electricity, I think we need to be very clear about what that energy is, where it going to be and how it is going to be paid for. At the moment, [in the UK], we don’t have that. But in other countries, we do. If you don’t have the clarity, then that just delays the decisions and delays the investment that this country needs. For the UK paper industry to continue to be competitive, the cost of energy needs to be addressed.”

Miles Roberts – Chief Executive, DS Smith

UK manufacturers have been vocal for awhile now about the rising cost of power, which is still much, much higher than in most European countries.

According to the Governments own figures, British business paid in 2023, on average, £0.27.7 per kilowatt hour (KWh) compared to just £0.16.4 in France or £0.17.5 in Germany.

In fact, since 2008, the costs for a medium sized business in the UK have increased by around 230%, compared to just a 150% rise across EU countries.

Miles Roberts went on to warn that the UK’s lack of a detailed plan for a future net zero power grid was also hurting business confidence and future investment.

As an example, he cited the fact that recent investments by DS Smith in factories in Poland and France followed detailed discussions with each country’s respective government about how the sites would be powered, what price they would pay and how the factories would be connected up to the national grids, but in the UK, where it employs 5,000 staff, the Government is currently evaluating options to replace a gas-fired plant that currently powers its Kent factory…. But he said they were yet to receive clear answers on how it will be able to source enough power or whether it can receive a high-voltage grid connection to meet its needs. 

That plant was installed three years ago, with roughly a ten year lifetime, meaning decisions about it’s replacement need to be addressed now.

“We’re now looking at what the new investment is, and how we are going to replace those gas turbines. But we’re unclear as to what is going to be the source of the energy, what is going to be the cost and how it is going to be transmitted. And we’re just one company – there are many others out there that are also heavy energy users.”

Miles Roberts – Chief Executive, DS Smith

In replay, the Minister for Industry said:

“Deindustrialisation must not be the result of decarbonisation. We know these energy intensive industries use a huge amount of electricity and we need to make sure those bills are coming down. We will look at anything that will kind of make it fairer and easier for people to manufacture and produce in this country.”

Sarah Jones – Industry Minister