Is it fair to ask energy-intensive industries to reduce consumption?

At a debate in Staffordshire, leaders from the ceramics industry warn they cannot be expected to switch off when trade booms
Woman with early Wedgewood pots
The ceramics industry in Staffordshire has come a long way from its historic origins, but is still an energy-intensive business sector. Photograph: Alan Webb/Getty Images

Politicians want us to use less energy at different times of the day to solve the energy crisis. Time shift, to use the business jargon, helps because it removes pressure from the grid by tapering use across the day. Charging customers more for using energy at the most popular times of day can help change behaviour, meaning we all have a more secure energy supply.

But what if your business requires high energy use and trade is booming? That was the difficult question being debated at the Guardian's third regional energy roundtable at North Stafford Chamber of Commerce in June.

In the area known as The Potteries, the local industry is particularly energy intensive. "It goes without saying in modern economies that energy security is essential," said Laura Cohen, chief executive of the British Ceramic Confederation. "While some businesses may be able to make a demand-side response, it's really difficult during a recovery being encouraged to switch off just as manufacturing is just starting to pick up, and those who can't having to pay extra to stay on. With a 100m-long brick kiln at 1,000C, you can't just switch that off at short notice without causing millions of pounds worth of damage."

Some ceramics manufacturers in the region report that energy bills make up 35% of their total costs. "Prices are extremely volatile. It makes running a predictable business model quite challenging. It does make running the business in the UK much more of a lottery," Cohen says. "People want to spend their time making things rather than playing the gas market."

She worries that fluctuations in the market combined with the greater use of renewables could be damaging to the security of energy supply for her members. Protected users, such as hospitals, are reassured that energy will always be made available to them on demand. Why is there no similar exemption for other industries who have no choice but to draw down on the grid? "There is no such security for many industrial users if there is a combination of events such as a cold winter and a loss of infrastructure or political instability," Cohen says. "If we have intermittent renewables on the system, when the wind isn't blowing we are going to need a back up. Domestic consumers are making real choices about when they use electricity and gas, but if your process is working flat out because there is the demand there it is challenging for businesses."

But Sara Bell, principal of the UK Demand Response Association, said all businesses had a responsibility to play their part in building a low carbon energy market. "Every user has a combination of flexible and inflexible demand. The demand that is flexible should be chasing the cheapest possible electricity cost. If we invest in the demand side and manage the renewables we put in we can allow the customer to benefit from the up side."

With such high costs, energy-heavy businesses may be forced to pass on the price of energy to customers. But some fear they will immediately lose businesses to foreign competitors as a result. Jon Cameron, group financial controller at Steelite International, said: "Customers don't care. We try and get a price increase through because of a change in legislation and they'll just go somewhere else. We've got to be competitive as well."

Some businesses have responded by changing the way they manage their energy contracts. Michelin has an energy bill of approximately £20m a year. "We get Christmas cards from our suppliers," joked commercial product director Darren Lindsey. Since the company employed a dedicated energy manager at each site it has saved 20% in five years. "We're being more efficient but at the same that that efficiency is being eroded because we're having to be more flexible in the marketplace at the moment. We're having to turn things on – and we're having to turn things off."

Consumer choice may also provide a role in supporting energy-heavy industries by promoting the concept of lifecycle emissions or impact. Buying ceramics may be expensive, but they are a sustainable product.

As Cameron put it: "Who's the biggest villain? Is it someone who uses twice as much energy to make something that lasts five times as long? We get a tax break for manufacturing efficiently, but nobody gets a tax break for buying an efficiently manufactured product."

Cohen agreed: "An alternative is for the UK to move to consumption-based emissions because that just forces us to ensure that we are not just exporting our jobs and important carbon back. Jobs and businesses are exported. Global carbon emissions go up and jobs go down. The countries with policies in place don't benefit."

Lifecycle emissions are challenging to measure but, "we need to move from being a throw-away society to one that uses durable products," she said.

So what policies might ease the pressure on industry? Staffordshire businesses said increasing gas storage in the UK would help.

"I think the government are ducking the issue on gas storage," explained Mantec chief executive Tim Kelly. "In this country it's pitifully low. There are ships coming across that can get diverted to Japan or Korea depending on who bids the correct amount, so its a lottery as to whether you get that import. As a country we need to have sufficient reserves." Up to 40% of gas imports to the UK are immediately exported as a commodity.

But Andrew Briggs, a development manager at Stoke-on-Trent council, concluded that local businesses were already doing all they could to help tackle energy sustainability and emissions. "The single biggest factor that's actually relatively achievable is power generation. After that it's households, after that it's transport. Right at the bottom of the list it's industry," he said.

At the table...

Karl Mathiesen, The Guardian (chair)
Joan Walley, MP for Stoke-on-Trent North
Davin Bates, Steelite International
Sara Bell, Tempus Energy
Andrew Briggs, Stoke-on-Trent council
Jon Cameron, Steelite International
David Charlesworth, The Crown Estate
Laura Cohen, British Ceramic Confederation
Tony Cotton, Johnson Tiles
Jane Gratton, Staffordshire Chambers of Commerce
Steve Johnson, Electricity North West
Tim Kelly, Mantec Group
Jim Kersey, Institute of Mechanical Engineers
Darren Lindsey, Michelin
Rob Hill, Wardell Armstrong LLP
Tom Nadin, Staffordshire Chambers of Commerce
Kevin Rendell, National Grid
David Woolrich, F Ball and Co

Roundtable report commissioned and controlled by the Guardian.
Discussion hosted to a brief agreed with the Big Energy Debate partners, and funded by the project. For more information on roundtables visit:

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