EU environmental and dear energy prices led to the closure of two of the last three surviving aluminium plants in the UK. Wylfa closed in 2009, and Lynemouth in 2012. The UK now has to import much of its aluminium requirement.
Dear energy is now eating into our ability to make our own cement. With a strong recovery underway in construction, the UK is being forced to import more of this bulky commodity to keep up with demand. In 2001 the Uk produced 11 million tonnes of cement. At the peak of the boom in 2007 it reached an output of 11.9 million tonnes, only to collapse to 7.5 million in 2009. Last year the industry managed just 8.2 million, with imports increasing then and this year to make up. The high costs of energy are cited as a major impediment to UK production.
In 1997 when Labour came to power the UK produced 18.5 million tonnes of steel domestically. This had slumped to just 10.1 million tonnes by 2009. Whilst the deep recession is part of the reason, the rise in energy costs over the last decade also led to a structural decline. Last year steel output had risen back to 11.9 million tonnes, way below the 1997 levels.
Dear energy has also hit glass making, ceramics, bricks and plastics. Many energy intensive processes are now too dear in the UK, especially at a time when the US is busily exploiting more and more cheap domestic energy. Now Germany is also struggling with dear and scarce energy, and even the EU is worried about the unreliability of Russian gas supplies, it is high time for a radical change to EU and UK energy policies. The UK should press on for domestic self sufficiency. This is feasible given the large reserves of gas, oil, and coal which we have and the plentiful supply of water for hydro power schemes.
The government says it wishes to press ahead with more domestically produced oil and gas. It is also planning a capacity auction to see if that will bring forward more investment in gas fired electricity stations. The EU renewables requirement means we end up subsidising both the dear energy from windfarms, and the cheaper energy from gas stations needed as stand by. Mr Davey is also offering incentives to industry to avoid using energy at peak times to try to balance the system.