S2 Ep. 11 (bonus) Decarbonise or Deindustrialise? Is This Really the Choice Facing Britain?
This week’s episode comes from Octopus Energy HQ where Amy Rennison is joined by Phil Cohen, Patrick Matthewson, Rachel Fletcher, and Aruna Ramsamy.
The conversation explores a growing tension at the heart of the UK’s industrial strategy: the push to decarbonise heavy industry is running directly into some of the highest industrial electricity prices in the OECD. Across steel, chemicals, manufacturing and energy-intensive production, the technologies for deep decarbonisation increasingly exist — but the economics, infrastructure and policy frameworks are not yet aligned to deploy them at scale.
What emerges is not a simple trade-off between climate ambition and industrial survival, but a more complex systems problem: fragmented policy design, high energy system costs, and weak demand signals are all shaping investment decisions in ways that risk slowing both electrification and industrial renewal. Against this backdrop, international examples like Sweden’s H2 Green Steel highlight how low-cost power, coordinated policy and long-term offtake agreements can unlock entirely new industrial ecosystems.
The central question becomes whether the UK can correct these structural issues quickly enough to prevent a gradual erosion of its industrial base while still pursuing net zero.
In This Episode You'll Learn:
Why UK industrial electricity prices are among the highest in Europe and how policy costs, network investment and market design contribute to them
How energy-intensive sectors like steel, chemicals and glass are already experiencing output declines linked to the energy crisis
Why electrification is widely seen as the main route to industrial decarbonisation, despite technical limits in some high-temperature processes
How fragmented policy between energy, industrial strategy and regulation is slowing investment and creating uncertainty for manufacturers
Why compensation schemes and exemptions only partially offset high costs and fail to address structural competitiveness issues
How projects like H2 Green Steel in Sweden demonstrate the importance of low-cost electricity, carbon pricing and coordinated demand for enabling new industrial investment
Why investors and manufacturers are increasingly calling for deeper market reform, including connection reform, flexibility markets and removal of policy costs from electricity bills