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Highlights
- Amid soaring energy costs, the UK businesses are expecting the same kind of support from their government as provided to their EU competitors.
- The UK Government is all set to update its energy security plans amid the ongoing cost-of-living crisis being faced by Britons, focusing on nuclear and wind power.
Ahead of the UK’s plan to overhaul its energy security strategy, the strategic heavy industries in the country have spoken up about their fears regarding the risks they would have to face due to lack of support from the UK Government. Amid the ballooning prices of gas and electricity, which are rising further due to the impact of the Russia-Ukraine crisis, UK businesses are expecting the same kind of support from their government as provided to their EU competitors. The UK firms are bound to suffer if other European countries successfully curb their gas and electricity costs.
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This week, the UK Government is all set to update its energy security plans amid the ongoing cost-of-living crisis being faced by Britons. Nuclear energy, onshore wind, and solar energy would be the focus of the new energy security plans, along with the continual exploration of oil and gas from the North Sea. Even though the new strategy is surrounded by controversies and has been delayed due to differences among ministers, it is finally expected to be declared on Thursday.
While PM Boris Johnson promised support measures for British industries earlier this month, business, and energy secretary Kwasi Kwarteng has said last week that the necessary steps to help the businesses have already been taken. Reportedly, these mixed signals have increased the fears among UK businesses that they might get minimal or no support at all from the government to cope up with soaring energy costs.
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As per industry leaders, the renewal of the compensation scheme which provides refunds to high energy-using firms would be a limited and insufficient solution. The Chemical Industries Association has warned that surging energy costs could lead to the closure of chemical plants and resuming them would be a tough job. According to trade body UK Steel, carbon costs in electricity need to be compensated fully by the Government, also renewables levies and network costs should have more relief.
Let’s look at the stocks of two energy-intensive companies which may be impacted by the same.
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Glencore plc (LON: GLEN)
Anglo-Swiss company Glencore plc is a globally leading metals and mining business. The commodity business has recently announced that it would abstain from making new deals with Russia. The FTSE100 firm has offered its shareholders a return of 78.11% over the last one year as of 4 April 2022. Glencore plc is currently offering a dividend yield of 3.9% a year. With a market cap of £66,854.47 million, Glencore plc’s shares were trading at GBX 507.10, down by 0.10%, at 8:04 AM (GMT +1) on 4 April 2022.
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Croda International plc (LON: CRDA)
Croda International plc is a UK-based speciality chemicals business. By 2025, the company is aiming for sales of US$1 billion from its Consumer Care arm. The FTSE100 firm has offered its shareholders a return of 23.85% over the last one year as of 4 April 2022. Croda International plc is currently offering a dividend yield of 1.3% a year. With a market cap of £10,966.17 million, Croda International plc’s shares were trading at GBX 7,926.00, up by 0.84%, at 8:09 AM (GMT +1) on 4 April 2022.
