Last week, we talked about the turbulence the energy sector is experiencing.
Things have gone from bad to worse.
More energy businesses have stopped trading because of the increase in gas prices. Six energy firms have collapsed this month alone in the UK, with up to 1.5m customers affected.
Energy prices are increasing for several reasons, including low stockpiles of gas, a damaged undersea cable that reduces the amount of gas we import, and the warm autumn weather which has a knock-on effect on the amount of energy that can be produced from offshore wind farms.
Why are companies going bust?
Smaller energy businesses are going bust because they’re buying the gas for more than they’re selling it to customers. They can’t pass the rise in gas prices to customers because of the price cap on energy bills, set by Ofgem.
But on October 1, that cap will be raised, meaning energy companies can start charging domestic customers more. This is leading to understandable concerns from lower-income families and those already living in fuel poverty. Around 15m Brits will be affected.
This crisis has emphasised the fragility of the energy market and that our reliance on imported gas is not sustainable.
We can’t ignore the shortage of petrol and diesel hitting large sections of the UK. The reason for that crisis is primarily to do with a shortage of lorry drivers and panic-buying (and the reasons for the lack of lorry drivers are varied), but it further highlights our massive reliance on getting energy from A to B, and hoping that the infrastructure around transporting and transmission runs smoothly.
The UK Government says the broader energy crisis is a short-term problem, but it stresses our need for innovative, longer-term solutions for powering the country.
This issue isn’t located solely in the UK. The rest of Europe is also seeking answers.
So, what are the solutions to the energy crisis?
Reducing imports and being able to rely on locally-produced energy is a solution.
Renewable energy that isn’t dependent on the weather is a solution.
Reducing the need for expensive storage infrastructures is a solution.
Innovative businesses, like Alpha 311 (and there are many others out there!), are a solution.
Renewable energy has to remain front of mind.
