Energy crisis and a solution
Mike Hedges MS
Gas prices are high and rising rapidly which has led to very high gas and electricity charges. The wholesale price of gas has increased by 266% in the past 12 months, including a 68% rise since February, according to Ofgem, as Russia’s invasion of Ukraine has made things worse. With 85% of UK households heated by gas boilers, this has led to spiralling costs and problems with paying energy bills for many people.
What has changed is that in 2020 the overall average UK energy bill was £1,287 per year based upon Government statistics although there are other published figures, they are all very similar; costs have now risen rapidly so that in October this year the bill will be capped at an average of £2500.
This has led to concerns over people having to choose heating or eating and to an increase in the number of vulnerable households. Vulnerable households are defined as households where the occupants include one or more of the following:
• a person aged sixty and over,
• a dependent child or children under the age of sixteen,
• a single person aged under twenty-five,
• a person living with a long-term illness or who is disabled.
Severe fuel poverty is when households needing to pay more than 20% of their full household income to maintain a satisfactory heating regime.
Fuel poverty is when Households needing to pay more than 10% of their full household income to maintain a satisfactory heating regime.
At risk of fuel poverty is when Households need to pay more than 8%, but less than 10% of their full household income to maintain a satisfactory heating regime.
Persistent fuel poverty is when households needing to pay more than 10% of their full household income to maintain a satisfactory heating regime in two out of the three preceding years.
As prices escalate the number in each category increases as many households move up to the next stage of vulnerability.
Action taken at Westminster is that from 1st October, a new ‘Energy Price Guarantee’ will mean a typical UK household will now pay up to an average £2,500 a year on their energy bill for the next two years. This is automatic and applies to all households. This will save the average household at least £1,000 a year based on current energy prices from October and is in addition to the £400 energy bills discount for all households. This applies to all households in Great Britain, with the same level of support made available to households in Northern Ireland. This is approximately twice what people paid in 2020 and is creating concern amongst many households.
Some immediate action that could be taken is to abolish the gas and electric standing charge which means people pay for energy to be provided when they cannot afford to use it and it eats up money from the token inserted before any energy is received. A windfall tax should be levied on energy companies. A Windfall tax would be a one-off levy on energy companies that have made huge profits from something they were not responsible for. Windfall taxes have been levied by governments on sectors of the economy previously such as in 1981, the then Conservative government put a levy on the banks, arguing they had benefited from high interest rates.
Medium term action that could be taken include increasing off shore and on shore windfarms, improving energy efficiency in houses and creating solar farms and placing solar panels on more houses.
Ways to improve home energy efficiency include roof insulation, switching to LED lights, not leaving things on standby, insulating walls, getting a smart meter with an in-home display, draught proofing windows, updating old boilers and installing solar panels
Working on the assumption we want to stop global warming and reduce energy costs then in the long term a number of developments are necessary. These are using tidal energy via tidal lagoons starting with the Swansea tidal lagoon. With the cost of energy now twice that of 2020 or three times without government subsidy, tidal lagoons have now become economically viable.
Improvements in battery storage and technology are awaited, substantial research is going on, but we still await a big breakthrough similar to the invention of rechargeable batteries.
Improve solar panels efficiency as we know that using concentrated photo voltaic cells (CPV) to focus sunlight onto an extremely high-efficiency solar cell that would be otherwise too expensive to use directly increases efficiency. The best traditional solar panels peak at 22% efficiency, whereas the cells used in CPV panels can reach 46% efficiency. Keeping them clean and check they are working efficiently will also improve efficiency.
Sustained and continual action is necessary. The price of gas may come down but the effect on the environment of burning it will continue to be a problem.
Mike Hedges is the Senedd member for Swansea East