The government must manage the immediate cost of living crisis created in part by the energy crisis or risk losing political and public support for net zero policies, a new report from the Institute for Government has warned. It is one of seven core recommendations made by the thinktank in its new Net zero: agenda 2022 report. If the government fails to act to mitigate the surging power prices in the UK on the back of a European gas shortage, it could fuel discontent on the backbenches and undermine previous cross-party consensus on the need to act of climate change, the report states.
Current 14th Jan 2022 read more »
The International Energy Agency’s (IEA) executive director Fatih Birol has urged policymakers to reject claims that the current energy price crisis is due to more low-carbon energy in the energy mix. In a blog published today (14 January), Birol wrote: “Unfortunately, we are once again seeing claims that volatility in gas and electricity markets is the result of the clean energy transition. “These assertions are misleading to say the least. This is not a renewables or a clean energy crisis; this is a natural gas market crisis.”
Edie 14th Jan 2022 read more »
New analysis by energy think tank Ember reveals that the skyrocketing price of fossil gas was responsible for 85% of the increase in UK wholesale electricity prices in 2021. In just one year, wholesale electricity prices quadrupled and it became almost five times more expensive to generate electricity from gas plants. “Gas is the villain. Not the green investments that can end the UK’s dependence on this costly and polluting fossil fuel,” said Ember COO Phil MacDonald.
Renew Economy 17th Jan 2022 read more »
The good news is that energy prices will be coming down. The bad news is nobody knows when for sure. The UK’s biggest energy supplier, Centrica, says high gas and electricity prices could last for another two years. The International Energy Agency (IEA) reckons that’s too optimistic. Expensive bills are a problem for firms, consumers and the government. Households could face a doubling of annual energy bills to £2,400 a year from October – a cost-of-living catastrophe for millions. While Labour proposes a support package, Conservative ministers have said little – fuelling suspicions that they intend to reduce demand for energy by making people poorer. Britain should look to John Maynard Keynes for answers. The basic fault of commodity markets, he saw, was the private sector’s failure to make effective use of stockpiling. Keynes proposed government storage of raw materials and foodstuffs to stabilise prices – by buying up essentials from world markets when they were cheap and selling them to consumers when they were dear. In 1942, he went further to propose an international system of buffer stocks to limit the fluctuation of the prices of key commodities. Keynes showed that buffer stocks could secure macroeconomic stability. His proposals were adopted partially by the United States, and others, after the second world war – becoming a defining feature of the golden age of capitalism.
Guardian 16th Jan 2022 read more »
Millions of families in England will be dragged into fuel poverty overnight when energy bills soar this April, research has found. The number of households who will find them unaffordable is to treble to 6.3 million when the price cap lifts, according to the Resolution Foundation. It said this meant more than a quarter of households would suffer “fuel stress”, the definition of fuel poverty in England, which means having to spend at least 10 per cent of family budgets on energy bills. The figure is 9 per cent but will hit 27 per cent if the price cap rises by more than half to about £2,000 a year as expected on April 1. Ofgem will announce the new price cap level on February 7 but drastic rises in wholesale gas prices mean a large increase is all but inevitable. Levels of fuel stress are likely to be highest in the northeast and the West Midlands, at 33 per cent and 32 per cent respectively, the foundation says. Others who will be hit hard include pensioners (38 per cent), those in local authority housing (35 per cent) and those in poorly insulated homes.
Times 17th Jan 2022 read more »
Urgent action is needed to reduce energy bills including a cut in VAT, the Scottish government has said. Ministers in Edinburgh have written to the UK government, saying there should be targeted support for those on low incomes. The energy secretary Michael Matheson and the social justice secretary Shona Robison have written a joint letter to the UK energy minister Kwasi Kwarteng.
Times 17th Jan 2022 read more »
Herald 16th Jan 2022 read more »