Energy Market Crisis – What caused it and how does it affect my accounts?

What triggered the energy market crisis?

UK wholesale markets have peaked in recent weeks. The problem is compounded by the depletion of summer storage facilities and the global demand for gas following the cold winter. Competition to replenish gas stores before the return of cold temperatures has now caused market prices to rise.

Global gas storage is a major concern, as half of the UK’s electricity is generated by gas-fired power plants. There has been a surge in gas demand in recent months following a series of disruptions to the nuclear power plant and the closure of France’s main power line.

England has had a very low summer season since 1961, which means low winds. Experts fear that the cold weather will worsen.

What do energy bills mean to me?

Market highs have led to some of the most expensive winter energy bills in the last 10 years, and an additional half a million people are living in abject poverty.

The Office of the Superintendent of Energy said last month that the default energy tariffs would go up by an average of 12.5%, given the rapidly growing energy market price between February and July. Since then, a further increase in energy markets is expected to increase energy bills again from April.

Even fixed-rate power supplies are becoming more expensive. Many one- to two-year contracts are now worth more than the existing tariffs in anticipation of rising prices.

Are you disturbed by my power supply?

If you are a small operator, then it is very possible. According to Barina’s energy experts, only 10 suppliers will be left at the beginning of the year at the end of the year.

Over the past five weeks, five suppliers have come together and more than half a million customers need a new supplier. The industry expects four other suppliers to arrive before the end of the month, and will have more results to follow the winter.

The good news is that the Supervisor is in the process of assigning survivors of the failed company to a new provider. Ofege advises customers to wait until they know who their new provider is before trying to switch to a new one – usually only a few days. Take a counter reading so that the next provider can provide accurate calculations while you wait.

Why is there a threat to the UK heavy industry?

British factories and steel producers play a significant role in British energy use, and are highly vulnerable to market fluctuations. Steel producers have already stopped working when prices of more than 1,750 / MWh per hour or more than 2,900% of average prices in the last decade.

In addition, two fertilizer factories in northern England were closed due to gas prices. Another chemical producer, Norwegian Yara International, plans to reduce its ammonia production by 40% in six factories across Europe, including the Fertilizer Factory.

What are the concerns of the UK food industry?

The government has held urgent talks with representatives of the food and beverage industry as well as representatives of the British meat industry, fearing that the crisis in the chemical industry could affect the supply of carbon dioxide to the food sector.

Fertilizer factories use gas to produce ammonium nitrate, and produce CO2 as a by-product. The carbon is used in beverages and beers, as well as for dry ice and for anesthesia before slaughtering animals in the meat industry.

Meat industry warns farmers to start “human” pork for the first time since the outbreak of foot and mouth disease

What can the government do to help?

Ministers are calling on heavy industry, the food sector and energy suppliers to cope with the winter.

The government held talks with representatives of the food and beverage industry and trade secretary Kwasi Quarting over the weekend to determine how serious the situation could be in the coming months. in the future.

Quarting was due to meet with OFM on Sunday to discuss how the government would support the industry and protect households. No decision has been made yet.

In Spain, the government plans to create a € 3bn (2.55bn) fund to reduce energy bills.

Greece and France are also considering subsidizing energy bills. The British government can also rely on energy prices to protect families.

Leave a Comment