Renewables are key to protecting consumers from high energy prices
Consumer energy prices in Britain have sky-rocketed, having a significant impact on household budgets. Since April 1st, families and businesses across the country have been affected, with the greatest burden being faced by the households with the lowest incomes. This crisis and the very real impact it has is, at its root cause, a fossil fuel crisis, led by surging prices, low reserves and high international demand.
David FloodSenior Vice President Offshore Wind
Russia’s invasion of Ukraine in late February is the most visceral example of these causes. While the appalling humanitarian cost will be at the forefront of our minds, the economic sacrifices of our sanctions on Russia are already being felt at home. As gas prices surge ever higher and uncertainty over the security of our energy supplies continues to build, keeping energy prices affordable will only become a greater priority.
The UK sources less than 5% of its gas supplies from Russia and just 8% of our oil demand, but as long as we are dependent upon fossil fuels, we will be subject to the whims of the international energy market and the balance between supply and demand. While the UK Government has committed to phasing out Russian oil by the end of the year we must go further. By ending our reliance on fossil fuels, we can protect British consumers from market volatility and ensure that household budgets are no longer dictated by unpredictable and spiralling costs.
How do we end our reliance on fossil fuels? The solution already exists – more renewable energy.
The UK is already committed to reduce fossil fuel dependence, with goals to decarbonise the electricity system by 2035 and reach net zero by 2050. Increased efforts now will help us not only reduce the impact of market volatility but reach these ambitious goals even sooner. Despite a subset of commentators calling for a referendum on net zero, it’s clear the British public support the continued rollout of green electricity, with almost two thirds of Britons already wanting the power they use to come from renewable sources.
As a nation we are already united in our solution.
Renewables are taking a larger and larger position in our energy mix and helping to reduce prices. Incredibly, 2022 has seen a record period where over half of the UK’s electricity was generated by wind alone. Last year the International Renewable Energy Agency (IRENA) found that two-thirds of wind and solar projects built globally in 2020 would be able to generate more affordable electricity than even the cheapest new coal power plants.
Renewable energy systems can also lead to price variations, so it is essential that the UK continues to invest in a diverse range of technologies. The Greener Grid Parks pioneered by Statkraft, which ensure that the UK’s energy supply remains flexible and stable whilst ending reliance on fossil fuels for inertia, are a strong example of this diversity. This week we are welcoming our first completed Greener Grid Park in Keith, Scotland, in a huge step forward for the UK’s goals to operate a zero-carbon electricity system by 2025. Keith will reduce consumer energy prices, proving that renewables and their supporting technologies are already driving down costs for consumers.
International integration is also essential to balancing volatility. The UK is making progress in this area with the North Sea Link being the latest interconnector to enter operation, linking our energy grid to reliable Norwegian hydropower for use in times of need and as a channel for exports in times of plenty.
By supporting an innovative range of technologies including wind, solar, interconnectors, balancing services, and battery storage - where the UK is a top global market, we can help curb the variability of renewables and reduce price volatility.
Ultimately, protecting consumers from market volatility is a priority. Everyone in the UK should be able to keep the lights on and their houses warm without vast price increases. Renewables are our path to making this a certainty.