So first, apologies for such a long post. Its a bit of a brain dump which was quite cathartic.
I watched the Panorama on the energy crisis. Although I knew most of the facts already it still made blood boil.
So here we sit in a nation which:
- is the least reliant on Russian gas in Western Europe
- has the greatest % of our energy generated by cheaper renewals
- has 50% of its energy needs met by reserves of gas and oil in our sovereign waters
- the consumer pays more than anywhere else in W. Europe
Why should that be?
- we have sold our energy assets to the likes of Shell and BP
- they sell the gas they generate to suppliers like British Gas at wholesale prices which are dictated by the energy markets
- gas wholesale prices have been driven sky high by demand caused by Covid recovery and then Russia war on Ukraine (the cost of supply has not rocketed up btw).
- electricity prices are pegged to gas prices. Gas price rockets, so does Electricity.
- electricity generated by wind or wave is relatively cheap but prices are still pegged to the wholesale price of gas. Despite market prices delivering record profit for renewable energy generators (wind farms etc), many still enjoy significant subsidies paid by us through our bills
- all of this results in massive profits for the Energy generators (BP, Shell, EDF, renewable energy producers) and Suppliers (BG etc) whilst consumers are forced into fuel poverty (7m already cannot afford to pay their fuel bills. That figure will rise massively after the new price cap).
- OFGEM are supposed to protect consumers but are more interested in keeping energy suppliers afloat
- the government response so far has been wholly inadequate (including their so called windfall tax which isn't retrospective and includes investment incentives, the cost of which negates most of the benefit)
- we await further proposals from our new Prime Minister
What are other countries doing about the crisis?
- It would be wrong to present this as a UK problem. Its not. We just pay more than most. The EU is trying to put together an overall package to help consumers and individual European countries are addressing in different ways to meet their individual needs.
- France has frozen gas prices at October 2021 levels and capped electricity price increases at 4% until at least the end of the year, and handed out €100 to low- and middle-income households to help pay energy bills.
The finance minister, Bruno Le Maire, has said any price increases next year would be similarly “contained”, with no catchup costs, while the government spokesperson Olivier Véran said France would “not allow what is happening in the UK to happen here”. The country has embarked on a “sobriety programme” aimed at cutting energy consumption by 10%, including setting temperatures in public buildings higher in summer and lower in winter. The private sector and households are expected to make similar efforts.
- Germany at the start of the war 55% of Natural Gas came from Russia. By this month, however, the figure had fallen to 9.5%. The Government has embarked on an ambitious programme to build floating LNG terminals and vowing to massively expand onshore windfarms. Some coal plants that were due to be shuttered have been reactivated. Several energy-saving measures have been enacted, including limiting temperatures in public buildings to 19C from September and turning off heating in common areas such as corridors, with the private sector encouraged to follow suit. Most heating and electricity bills are up by about 10% year on year, but the real shock will come in 2023: Berlin’s tenants’ association expects landlords to demand additional retrospective energy payments equivalent to two months’ rent.Facing “a tripling, at the very least,” of monthly consumer bills next year, the government is paying all people in regular employment a one-off rebate of €300 in September. Students and welfare recipients have already received double their usual lump-sum payment to assist with heating private homes.
- Norway, a huge natural gas producer it currently supplies approx 25% of UK gas from its largely state owned generator = massive windfall profits for the state. Almost 90% of its electricity is generated from hydroelectric dams. Despite that it has seen domestic power prices soar owing to low water levels in its reservoirs and unusually high electricity exports. The government is considering limiting exports and has capped electricity bills at 0.7 Norwegian krone (€0.07 or £0.061)* per kWh, with the state covering 80% (rising to 90% in October) above that. Further measures are under discussion.
- * UK Electricity cap is currently sitting around £0.28p approx 5 times more expensive.
well done if you got to the end :-)
