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The European steel industry recommendations on Industrial Demand Side Response
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Executive summary
➢ As decentralised energy systems will be dominated by variable and intermittent weather-dependent electricity generation, the provision of flexibility services under all relevant time-frames will need to be scaled massively to maintain an efficient functioning and security of supply.
➢ The European steel industry is already a key provider of flexibility in the EU electricity system.
➢ The need to realise in record-time new fossil-free generation capacity and expand electricity grids, key enablers of the decarbonisation of industries, shall nonetheless remain the priority.
➢ The sector could contribute further provided that the structural challenges around the energy transition, namely the speedy roll-out of new generation capacity, the expansion of grids, and the restoration of cost-affordable electricity prices, are addressed first and as a priority.
➢ The assessments of flexibility needs, technology potentials, and the related target-setting process shall preserve and respect the economic, organisational, and technical limits of industrial production processes such as steel.
➢ European and national initiatives on demand-side response should create the optimal conditions for industrial consumers to provide flexibility while retaining international competitiveness and limiting overall electricity system costs:
➢ The steel sector overall welcomes the increased focus and planned actions to unlock the full potential of the wider range of DSR technologies in the pursuit of increased system resilience and more efficient use of electricity grids.
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Brussels, 25 July 2024 – Major indicators in the European steel market show a steeper-than-expected downward trend, further impacting the outlook for this year and the next. Poor demand conditions, driven by ongoing factors such as high energy prices, persistent inflation, economic uncertainty and geopolitical tensions, are exacerbated by a manufacturing crisis affecting the largest steel-using sectors, including construction and automotive. According to EUROFER’s latest Economic and Steel Market Outlook, apparent steel consumption is further deteriorating. After a slump (-3.1%) in the first quarter of 2024, its rebound for the full year has been revised downwards (to +1.4% from +3.2%), as well as for 2025 (+4.1% from +5.6%). Similarly, output in steel-using sectors, after a decline in the first quarter (-1.9%), is projected to experience a deeper-than-expected recession (-1.6% from -1%). A recovery is anticipated only in 2025 (+2.3%). Steel imports continue to show historically high shares (27%).
Third quarter 2024 report. Data up to, and including, first quarter 2024
Picture Copyright: European Union, 2024 Source: EC - Audiovisual Service
Brussels, 18 July 2024 – The re-election of Ursula von der Leyen as President of the European Commission paves the way for the continuation of the ambitious initiatives started in her first term. For a stronger and prosperous Europe, defining a pragmatic set of measures within the first 100 days of the new Commission mandate is the right step forward to ensure the success of the EU’s industry transition, if properly implemented. The European Steel Association urges that the Clean Industrial Deal be complemented as a priority by a European Steel Pact, as proposed by the German delegation to the European People’s Party (EPP).