So we are in an “energy crisis”. How did huge energy price hikes and the prospect of power cuts come about? Could renewable energy have more of a role in preventing this happening in future? Why are my costs rising when I’m with a green energy provider just using electricity? Here is a potted history which tries to shed some light.
- 2014: A UK Renewable energy auctions start allowing companies bid to provide wind or solar farms, wave power etc. at the lowest price. Renewable energy costs reduce over time as technology advances and economies of scale grow.
- 2014: Deregulation of the retail power market to increase competition; the number of small suppliers (often with less solid financial backing) increases the total from around 12 to 70.
- 2017: Closure of the largest British gas storage capacity facility by Centrica means the UK is more open to price shocks and supply interruptions. Today the UK holds just 1% of Europe’s gas storage capacity.
- 2019: An energy price cap is introduced and by October is set at £1179.
- 2021: China’s gas usage increases to fuel its post-covid economic recovery, pushing up gas prices for Europe. Smaller UK energy suppliers collapse, customers switch to more expensive tariffs.
- 2022 February: Russia escalates its attack on Ukraine. Europe gets 40% of its gas from Russia which is put at risk, so big price rises occur for Britain as well. Electricity prices go up as they are set by the most expensive element of the electricity generation fuel mix (less than half of our electricity is generated by gas).
- 2022 May: A windfall tax is announced in reaction to the huge profits from coal and gas extraction as a result of price rises, which (flying in the face of our need to reduce carbon emissions) incentivises investment in fossil fuel extraction. The price cap is increased to around £2500.
- 2022 July: Offshore wind price is NINE times less than the current cost of gas in the 4th Renewables Auction. 85% of Britains’ domestic heating is still supplied by gas.
Worrying times, but opportunities exist. News of a planned expansion in our local wind farm would be very welcome to those who, like the Energy Savings Trust, believe:
“Moving to renewable energy sources like wind and solar power will reduce our dependence on fossil fuels like gas, helping to avoid future energy crises…”
PS: If you are interested in what you can do in your home to reduce your dependence on fossil fuels and on state energy provision, our Shoreham Society 18th November event will focus on home Retrofitting.