The UK’s prohibitively high electricity prices are slowing the pace of electrification.

The cost of electricity in the UK is preventing industrial electrification, according to speakers at the Clean Power 2030 Summit in London.

Ben Westerman, head of policy and advocacy at Electrify Britain, said electricity prices in the UK were “extremely high” compared to the rest of the G7 and most European countries, creating a barrier to companies’ decarbonization plans.

While conversations about electrification tend to focus on energy-intensive manufacturing industries such as steel, chemicals and concrete, “most of the decarbonization is happening in companies that are not considered energy-intensive,” Westerman added.

He said the “vision of the economy imagined by politicians” does not reflect the reality of industrial electrification and decarbonization in the UK, where energy-intensive industries are in significant decline and their role in the national economy is shrinking. Energy-intensive industrial clusters along the UK’s coasts are currently the focus of electrification policy, but “we don’t really have a policy for the rest of the industry,” said Professor Peter Taylor, chair of sustainable energy systems at the University of Leeds.

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Solving this problem requires shifting the focus from supply to demand, “understanding what the demand for electrification is” if electricity prices are “right,” and then developing ways for businesses to choose to electrify, Taylor said.

Westerman said that none of the countries that have successfully adopted widespread electrification have done so without effective electricity subsidies for businesses. In the UK, most of these are mainly low-intensity industries.

Data center demand is a hot topic in the industry, but it is unclear to what extent it will affect future electricity demand. Westerman suggested that a balance needs to be found for data centers coming online in the UK as some businesses decide to abandon the grid and rely on power sources to power their operations. “We can’t subsidize Google’s energy,” he said, adding that off-the-shelf generation would raise system costs and social backlash issues, necessitating a cautious approach to data center electrification and load management.

The panel discussion followed a presentation by Rachel Hay, head of energy supply at the Climate Change Committee, who said lowering electricity prices was “key” to continuing to reduce the UK’s carbon emissions. She added that further savings would be achieved on top of progress made to date through electrification, rather than replacing current generation with renewables.

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