1 of 3 posts – Energy Crisis Underscores Need for Net Zero Delivery
On the 3rd of February 2022, Ofgem announced an increase to the consumer energy price cap, which means that millions of households will see their energy bills rise by about 54% from Spring 2022 onwards, equating to an extra £693 a year.
The current energy crisis is driving a general rise in the cost of living, and the vast majority of that is down to the rise in wholesale gas prices. There’s no single cause of this gas price rise – it’s more to do with a combination of multiple factors.
For starters, the longer winter of 2021 meant that European and Asian countries burned through significantly more of their existing gas reserves in order to heat their homes.
The multiple lockdowns that many countries suffered didn’t help either, as that meant demand was higher and production was lower. Plus, the weather was less windy over the last summer. With less wind power available for electricity, that meant that once again the world turned to its existing gas reserves.
The entire situation has shone a harsh, unflinching spotlight on the UK’s reliance on fossil fuels. While we’ve made some good progress on this front before, we’ve evidently still got a long way to go, as our domestic gas prices remain inextricably tied to volatile international markets.
Up until now, the main thing protecting consumers from these price rises was the energy price cap. Ofgem initially resisted moving this cap, to the extent that it even ended up forcing multiple smaller suppliers out of business, as they were forced to buy gas at higher rates than they were allowed to sell them. But now prices have risen to such an extent that even the price cap can’t protect consumers any further, and Ofgem has been forced to raise it.
As millions of people are forced to grapple with soaring costs, the government is being urged to accelerate the nation’s shift to renewables and prioritise implementing a more effective Net Zero strategy, to protect Britain from similar crises in the future. More renewables under the Net Zero strategy is one of our best routes out of this crisis, as it provides us with valuable energy security in an increasingly insecure world.
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13 September 2024
