Editorial comment
It’s a little strange to think as I write this on a drizzly late-September morning that it was as recently as August that I commented on the record-breaking heatwave spreading across Europe. Rivers had dried up, reservoirs evaporated, wildfires broke out across the continent, and unprecedented temperatures were recorded, including 40.3°C in the typically mild UK.
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Much has changed in the UK since then. The country has a new monarch for the first time in the lives of most of the population, it also has a new Prime Minister (the fourth in six years… ), and the Autumn Equinox on 23 September marked the end of astronomical summer.
Indeed, winter is coming, and one thing that hasn’t changed is the ongoing spectre of soaring energy prices expected over the coming months. Sanctions on Russian energy exports in response to Vladimir Putin’s invasion of Ukraine have significantly constrained global supply to the point that even countries that weren’t particularly reliant on Russian energy, such as the UK, are having to pay significantly more on the global market.
This has already been painful for domestic consumers in the UK, with the energy price cap (which determines the rates that a supplier can charge for their default tariffs) rising from £1277/year for the average household to £2500 as of 1 October. In addition to other measures, the government has at least now confirmed that the domestic price cap will freeze for two years, whereas previously it had been anticipated to continue rising to at least £3549.
Painful though those price rises might be to a domestic budget, the volumes of energy used by individual homes pales in comparison with commercial and industrial usage. Indeed, to try and keep businesses operating over the winter, the UK government has announced a cap on prices for businesses with figures expected to be £211/MWh for electricity and £75/MWh for gas. Though frozen, these figures are still significantly higher than those for October 2021 (when the average price for electricity was £117/MWh), but likely to be much more palatable than the £540/MWh that had been forecast.
Even with this support (and similar packages offered by other European governments), it’s going to be a tough winter for energy-intensive industries, such as cement. But perhaps there is a silver lining to this cloudy forecast?
In much the same way that COVID restrictions and pandemic lockdowns ushered in rapid advances in terms of remote working and the deployment of digital technologies, the current energy challenge could provide the impetus to accelerate the cement industry’s ongoing drive to greater operational efficiency and reduced reliance on fossil fuels.
Being able to produce cement more efficiently and with less reliance on heavily polluting commodities that rapidly fluctuate in price, isn’t just good for the environment, it’s good for the bottom line too.
