What Has Caused The Energy Crisis?

In homes up and down the country to the houses of parliament, the energy crisis is gripping the national agenda. With energy prices set to spike again in April, after a revision to the Ofgem price cap, the crisis is far from over.

The current surge in energy bills is the result of an amalgamation of factors that have combined to create a perfect storm of market uncertainty.

Whilst fundamentally, the pandemic has seen more people spend large amounts of time at home, therefore consuming more energy and draining reserves, global factors have played a huge role in the crisis.

Tensions between Russia and Ukraine have led to strained relations between Western Europe and Moscow, who have previously been relied on for a substantial portion of our energy supply. And Western Europe's hesitancy in approving the Nord Stream 2 pipeline has resulted in Russia placing further restrictions to their energy supply.

Speaking in Ideal Home last week, our CEO Kristina Rabecaite explained that:

“In January this year, Russia provided just 40% of the natural gas they supplied in January 2021. This huge hole in supply has led to consumers across Europe seeking alternatives. This pushes up demand and, naturally, prices.”

It is not just issues with Russia that have intensified the domestic crisis. The UK has some of the lowest levels of gas storage capacity in Europe. Despite our population size, the UK reserves only 1% of Europe’s total gas storage. The Netherlands, by contrast, stocks 9%, whereas Germany’s gas storage capacity is a massive 16 times the size of Britain’s. It leaves us massively exposed to market instability.

All of this - as well as the recent market volatility - demonstrates the serious need for us to rethink our energy supply market.

We should give serious thought to finding a long term solution that supports a thriving renewable energy supply which we know will benefit consumers long term. British-based, subsidy free energy, which does not rely on the unpredictable nature of global events, would drive down energy prices and bring bills down for millions of families across the UK.

PPAYA is part of this solution as we offer British renewable energy suppliers the opportunity to get the best price for their energy, supporting the growth of the industry and maximising the output of clean power which is great news for consumers and offers an exciting future British energy market.