The cost of supplying a household with energy is rising. According to the Office of National Statistics (ONS), the wholesale price of gas in January 2022 was almost four times higher than in early 2021. This means that for many people fuel poverty is becoming an increasing worry, with lower income households being hit the hardest.
These rising energy prices were sparked by an increase in the Ofgem energy price cap in August. However, on 3rd February 2022 Ofgem announced that from 1st April 2022, the energy price cap would be updated. This means that those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year, and prepayment customers will see an increase of £708 from £1,309 to £2,017. Ofgem say that this increase is due to a record increase in global gas sales over the last 6 months.
While the Russian invasion of Ukraine has made the price of gas volatile, it is not the only reason why energy prices are soaring. Currently imports from Russia made up less than 4% of total UK gas supply in 2021. With The UK’s single largest source of natural gas coming from the North Sea and the Irish Sea making up about 48% of total gas supplies. Around 32% of the country’s gas is from the European continent through long-distance pipelines, mostly from Norway. There is a hopeful outlook for Europe, as Norway is leading the way in producing sustainable and renewable energies.
Natural gas is quickly becoming the cheapest and fastest growing fossil fuel in the world. It is forecast to be the strongest-growing fossil fuel and will increase by 0.9 percent from 2020 to 2035. It is the only fossil fuel expected to grow beyond 2030, peaking in 2037. However it comes at a cost, as the International Energy Agency (IEA) say that flaring emissions must drop rapidly to get on track with the IEA’s Net Zero Emissions by 2050 Scenario.