Industrial demand for electricity is still falling

Industrial demand for electricity is continuing to plunge in Britain, despite signs of an upturn in the nation’s economic fortunes, according to new government figures. Sales of electricity to factories, mines and other manufacturing sites fell by 11.3 per cent to 22.3 terawatt hours in the three months to September 30, down from 25.05 terawatt hours in the same period last year. Jeremy Nicholson, spokesman for the Energy Intensive Users Group, said that the bulk of the decline was attributable to a “savage contraction” in British industrial activity. Nick Campbell, an energy analyst at Inenco, said that the fall in demand was chiefly the result of continued closures of big manufacturing plants. Anglesey Aluminium, owned by Rio Tinto, closed its smelting operation at the end of September after gradually scaling back production for several months. It had been Britain’s largest single user of electricity, consuming up to 255 megawatts of power — enough to supply a city the size of Southampton. The plant was supplied by a direct link from the nearby Wylfa nuclear power station, which is scheduled to close next year. Corus, the steelmaker, is another big industrial consumer of electricity, but has been cutting back on production this year. Last week, Corus announced new plans to mothball part of a steel plant in Teesside because of a lack of long-term contracts to support production. Mr Campbell said that the decision was likely to have a big knock-on effect on industrial energy demand throughout the Teesside area. “There are a lot of car plants in that area ... the impact of the closure on industrial demand for energy will ripple out across the region into 2010,” he said. “Whilst there is some talk of economic recovery, it appears that, in terms of hard evidence, UK industry is still feeling the pain of the economic downturn with regards to energy demand.” Mr Campbell said that there were some signs that the reduction in demand was also being driven by a renewed focus on energy efficiency programmes by British businesses. However, Mr Nicholson said that improvements in energy efficiency would be “trivial when compared with the impact of the recession”. He said that many companies in industries such as cement production and the manufacture of bricks and glass had cut output to about 40 per cent of capacity for much of this year. Electricity statistics from the Department for Energy and Climate Change also show a milder, but still marked downturn, in total UK electricity demand over the same period. Total power demand, which also includes household and commercial demand from shops, offices, hospitals, schools and other public sector groups, fell 7 per cent to 68.78 terawatt hours, down from 73.82 terawatt hours last year.