Energy prices are at the forefront of everyone’s mind right now. It is a growing concern from low-income families to huge businesses – no one has been left unaffected by this current crisis. Much of the issue stems from Putin’s weaponisation of fuel, along with the knock-on effects of Covid, on top of an already diminishing fossil fuel supply. Whatever the cause, the situation has exposed real weaknesses in the UK’s energy security.
The Government has taken decisive action in response. Several initiatives and provisions have been enacted which will act to combat this crisis. Their plan is multipurpose; not only will it save consumers money, but they are also planning to support businesses and public sector organisations, tackle the root causes of problems, boost domestic energy supply, boost growth in the energy sector, and curb inflation rises.
How will households be helped?
The Government has announced that from the 1st of October, a typical UK household will now pay up to an average of £2500 a year on their energy bill for the next two years. This is thanks to their new ‘Energy Price Guarantee’ which limits the price suppliers can charge customers for units of gas. This will save the average household at least £1000 a year! Also, this will act in addition to the £400 energy bills discount, rather than replacing it.
How will Businesses be supported?
Businesses are not able to benefit from the Energy Price Guarantee, so other provisions have been made. A new 6 month scheme for businesses and other non-domestic energy users has been devised. It will benefit and protect them in a similar way to consumers, making sure they don’t suffer from wildly rising energy costs. Support will continue after this 6 month scheme has elapsed. Also, reviews will take place to determine where the help is needed most.
In addition, Energy Suppliers themselves will be protected as the Government will pay them the difference between this new lower price and what they would have charged otherwise. This means that they will not suffer either.
What are the long-term solutions?
Much of what has been discussed thus far have been short-term solutions to address immediate threats. This is not a sustainable solution, since the government is paying out a considerable amount. So, energy specialists have set in place plans to accelerate domestic energy supply and make the UK more self-sufficient with its energy. They plan to:
- Launch a new oil and gas licensing round as early as next week, likely leading to over 100 new licenses
- Lift the moratorium on UK shale gas production. This will allow permissions to be attained so long as there is local support
- Drive forward the acceleration of energy supply from North Sea oil and gas to clean energy like nuclear, wind and solar
- Continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set direction of getting new nuclear projects online in the UK.
- Undertake fundamental reforms to the structure and regulation of energy market through recommendations from a new review of the UK Energy Regulation.
- Launch a review to ensure we are meeting our Net Zero 2050 target in an economically-efficient way, given the altered economic landscape. Chaired by Chris Skidmore MP and reporting by the end of this year, it will ensure delivering the target is not placing undue burdens on businesses or consumers
Speaking on the matter, Prime Minister Liz Truss said:
Decades of short-term thinking on energy has failed to focus enough on securing supply – with Russia’s war in Ukraine exposing the flaws in our energy security and driving bills higher. I’m ending this once and for all. I’m acting immediately so people and businesses are supported over the next two years, with a new Energy Price Guarantee, and tackling the root cause of the issues by boosting domestic energy supply. Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation againPrime Minister Liz Truss
What is my role?
As these schemes progress, the government will no doubt be relying on the work of energy professionals to determine the success of their actions. If you would like to be part of the fight for a more energy-conscious country, then please consider getting involved in the industry. The courses here at Energy Trust are a great way to get started, learn a new skill, or even deepen your existing knowledge. Please take a look at our upcoming courses. Book your space online, or give us a call on 0333 012 0002.