Britain’s Rising Energy Costs
Posted on Feb 2, 2016
A recent study published by the National Snow & Ice Data Centre in Boulder, Colorado, has shown that Arctic sea ice is 80% less than it was 30 years ago. The significant melting of Arctic ice has caused a surge in the cold water brought about from the regular melting and freezing of this ice. This increase of cold sea water has intercepted the jet stream from the Southern Hemisphere which brings warm oceanic currents past us. These currents are what maintain are more balanced seasonal weather system and in the past have prevented us from enduring the extremely cold winters that Canada is exposed to even though we are on the same latitudinal lines as Canada. As more cold water enters the ocean the jets streams are more likely to be interrupted which could lead to significantly colder winters as well as increased chances of flooding and droughts.
As we are all aware the current trend of cold weather has extended well beyond the usual seasonal months, this has been demonstrated in the sustained snow storms that could potentially continue into April. Excluding areas such as the Pennines, the Highlands or the Peak District regular snowfall at the end of March is practically unheard of. The relentless snowfall has placed a continued strain upon public services such as buses and trains as well as causing many disruptions to roads and motorways leaving some areas almost unreachable. As well as the strain it has potentially put on businesses by forcing temporary closures it is the possible long term impact through rises in energy costs which is also being felt.
As early as January Steve Holliday, Chief Executive of National Grid, said: “In any scenario, it is hard to imagine that the costs of our energy are going to be lower than they are today.
“It is not the real world. People should be honest with consumers. Energy costs are going up.
“The challenge for the Government and industry is how to keep those cost increases as low as possible.”
In keeping with these comments the persistant cold weather has lead to an increase in energy consumption which has in turn forced a general increase in the cost of gas and electricity.
There are now also fears that Britain has become too reliant upon gas and oil imports from countries such as Russia, Norway and Qatar. This was further emphasised during the closure of a natural gas supply pipeline from Belgium where the cost of gas rose by 50% on the day markets from 100p/therm to 150p/therm. The markets then stabilized at 100p/therm once the pipeline was reopened but this is still above the average cost of gas for this time of year which normally sits at around 60-70p/therm.
With increasingly dramatic fluctuations in temperature, a greater reliance on imported energy and an unstable economy it is unlikely that any of us will avoid the bite of rising energy costs. Without a long term, sustainable solution the energy market will continue to be volatile without ever abating. Now is not the time to continue wasting money on perpetuating what will eventually be a defunct industry. Energy companies should see this as an opportunity to invest in a green solution, a solution that can allow Britain to be an independent energy island able to produce enough electricity for it’s own needs.
D-ENERGi have started to roll out smart meters to its valuable portfolio of customers. By the end of 2020, around 50 million smart meters will be fitted in over 26 million households across Wales, Scotland and England. This is the biggest national infrastructure project of our lifetimes. D-ENERGi are planning to switch all of its customers to smart metering by end of September 2015. This is a whopping 5 years ahead of any of the big six are expected to complete their national rollout of smart meters.
Fossil fuels as we most commonly know them are coal, oil and natural gas. Oil and natural gas are namely known for being located in underground reservoirs but they can also be found in other locations such as shale gas and tar sands. Previously these were considered to be too costly to excavate and make them commercially viable, it is only thanks to the advancements made over the last ten years in drilling technology that these can now be accessed and sold at a profit.
As with many countries Britain is a source of shale gas but this is an as yet untapped resource and yet one that is understandably becoming more and more appealing to businesses and the government. The North Sea oil rig is one of the main contributors to the British Economy and quite often the economy rises and falls with the output of these oil fields; the economy shrank by 0.3% in the final quarter of 2012 because of declining gas and oil output.
“Shale gas could be a new North Sea for Britain, creating tens of thousands of jobs, supporting our manufacturers and reducing gas imports.”
The above statement was made by Corin Taylor, Senior Economic Adviser and author of a new report from the IoD regarding the potential impact of frakking for shale gas on the British economy. Such statements will undoubtedly incite excitement in a government that is looking for an immediate solution to their fiscal woes.
The report cited government figures that estimate 76% of the UK’s gas would be imported by 2030 the cost of which would be around £15.6bn. per year. However, according to this report, if shale gas were to be aggressively pursued gas imports would be reduced to around 37% by 2030 at a total cost of around £7.5bn. per year.
The above figures are clearly an encouraging incentive and shale gas has been somewhat of a revolutionary natural resource in countries that have found themselves with an abundance of it. The two most hotly discussed examples can be found in Northern America. The USA is hoping to be nearly entirely self sufficient regarding energy thanks to their vast reserves of shale gas and Canada is looking for a major boom to it’s economy thanks to their recently discovered tar sands, also known as oil sands. However, what on the surface appears to be the answer to all our looming fears over the future of global energy production could potentially force climate change into an irreversible state.
The process by which shale gas is extracted is called ‘frakking’ and involves drilling a well to the depth at which the shale rock sits and then blasting the rock with water and chemicals. As the water and chemicals produce fissures in the rock natural gas is released and can subsequently be siphoned off and used as energy. One of the most commonly cited issues with frakking is that the chemicals used in the process can contaminate local water suppliers as only 50-70% of surplus water is recovered. However, these figures are regularly disputed and though there are examples of this, such as in Pennsylvania as outlined in this study, they appear to be isolated incidents and are yet to be corroborated by other communities located near frakking sites.
There are obvious benefits to excavating the shale gas resources, the economic boost alone is incredibly appealing, but surely this can only be seen as a desperate attempt to hold onto a system that will ultimately fail us. These resources can only ever be finite, and whilst they are available to be used their use will ultimately push climate change to such a degree that there is no stopping it and certainly no returning from it. We should see the dwindling supply of fossil fuels as a reason to pursue something new, to invest in renewable energy solutions that could potentially reverse the devastating impact that carbon emissions have had.