In this week’s blog post, we’re showcasing the most relevant news regarding energy throughout the past week.
Business Affected by Energy Issues
It has been an incredibly interesting yet devastating week for the energy sector with many more UK based suppliers ceasing to trade due to the current energy climate. Up to now twelve UK energy suppliers have closed this year, with a further two in Pure Planet and Colorado energy confirming the end to their business today (14/10). This has caused disruption to over two million UK customers whose energy supply will be transferred to a new company by regulatory department Ofgem. Furthermore, the future for smaller energy suppliers is looking sombre, as it has been reported that UK gas shipper CNG has communicated to up to fifteen domestic energy suppliers that it will no longer be providing energy to themselves, increasing the pressure during this unstable climate.
Additionally, energy intensive industries have been confronted with rising energy bills and in some cases have paused production or ceased trading. The increased costs could be passed onto customers or even cause job losses in some industries. Other business utility bills are suggested to rise through this next yearly quarter, even if it’s as limited as utilising energy for restaurants, cafes or heating up offices. Therefore, proving that this energy issue is an important topic which affects more than those directly in the energy sector.
If you are a business worried about the rise in energy, feel free to get in contact to discuss the increase in utility prices and find out if there is a best deal while everything is rising.
The Rise in Market Price
The rising market price for energy, which has increased 250% since the start of the year, has been caused by a myriad of factors. The supply and demand issue has increased the prices tenfold, as our return into a normalised post lockdown society has been halted by a limit of worldwide gas and energy supplies. Stored gas levels have been increasingly lower than normal as a direct effect of Europe’s cold winter. In addition, this summer reported a lack of windy days which has limited windfarm output and created higher reliability on traditional energy. Not to mention, a multitude of smaller issues, including flooding in Chinese coal mines and a fire at a nation grid site. All these factors have created a lower supply and a higher demand, riding up the market price, especially on natural gases. This has come to a point where even large energy supplier E.ON has updated it website to read “unfortunately, we are currently unable to offer you natural gas products”.
Due to the current energy crisis, this discourse has been prevalent throughout the news and the government for the past few weeks with both business secretary Kwasi Kwarteng and PM Boris Johnson commenting on instant and future solutions to assist Britain’s energy issues. On Monday 11th October, Kwarteng had issued a formal proposal to the treasury to assist propping up energy intensive businesses with state backed loans. These loans would assist with energy bills through the next quarter until the market price decreases, which is appearing to be around March 2022.
Additionally, Britain’s energy supply issues may have to be supported by alternative countries, such as Russia who currently have some of the largest gas deposits in the world. The thousands of kilometres of pipelines which supply Europe could assist with the quantity of gas required for the UK.
The current energy issues the UK are experiencing have become a catalyst into the conversation of renewable energy and the net zero energy plan. At the end of last week, PM Johnson and business secretary Kwarteng pushed forward the plan for a decarbonising net zero electrical grid from 2050 to 2035. The tumultuous period in the sector has accelerated the importance of renewable energy, with plans to increase an excess in solar and wind power reliability, increasing renewable hydrogen and assisting Britain to avoid future energy issues. Furthermore, energy suppliers Octopus have been awarded large financial reward to invest in renewable projects throughout Europe. It appears that the focal point for the future of energy is renewable.
News Sources Referenced:
(https://lnkd.in/gyKPhcBn , https://lnkd.in/gbUui63T, https://www.current-news.co.uk/news/net-zero-electricity-grid-by-2035-target-announced-to-strengthen-britains-energy-security , https://lnkd.in/eJ65DcPa , https://lnkd.in/d7YWG5Xn , https://www.bbc.co.uk/news/business-58090533, https://www.bbc.co.uk/news/business-58879101 )