We must move on to renewables, but the role fossil fuels will play may surprise you.
Energy Prices are Soaring
I’m sure you’ve seen it plastered all over the news; energy prices are soaring. In April 2022, the energy price cap in the UK increased a whopping 54% and is on track to rise to £3,244 a year in October. Even more daunting, there’s no price cap on commercial contracts. As of late, there have been some wild variations in business rates for energy, with suppliers increasing their out-of-contract rates by an average of 100%. So why, when more people in the world have access to energy than ever before, are you paying more for this basic commodity?
British Dependency of Fossil Fuels
Well, the first thing to know is that the UK has a problematic reliance on fossil fuels, particularly natural gas. Currently, fossil fuels make up three-quarters of the UK’s energy mix, with oil and gas being used to generate the electricity to heat our homes, power our businesses and fuel our Ford Fiestas. There are major downsides attributed to this dependence, however. As a nation, Britain stands in the firing line to unpredictable geopolitical relations and major global events, which increasingly have been happening at an unforgiving rate. In the past 18 months your business has paid more on their bills because:
- a freezing northern-hemisphere winter depleted fossil gas storage levels
- increased demand and prices across Asia resulted in liquefied natural gas shipments being delivered there rather than the UK
- UK’s demand has risen as Covid-19 restrictions have been lifted
- continuing issues with Nord Stream 1, the huge pipeline that channels natural gas from Russia to Europe (now working at just 20% capacity) mean fossil gas imports from Russia via Ukraine have not stepped up to meet the increase in UK demand.
These factors, which operate beyond our control, are pushing up costs for businesses across Europe and driving rising inflation, fuelling fears of a coming recession.
So where is the bargain? Are Renewables really the solution?
In short, yes! Energy market experts Iberdrola say a rapid-fire transition to green electricity is the only way to avoid the volatility of fossil fuels. And the numbers don’t lie, generating electricity from fossil gas power plants already in the UK is 300% more expensive than from brand-spanking new onshore wind and almost twice that from new solar.
The UK must move away from fossil gas and into renewables, and, to our credit, a lot is being done to build self-sufficient sustainable infrastructure.
‘Energy Transition Culture’ is taking hold
The UK’s renewable electricity outpaced its fossil fuel generation for the first time in 2020 and could remain the largest source of electricity in the future. Driven by market-leading technologies, falling costs and governmental support, the UK has 11,000 wind turbines in operation, producing 25% of the Brits’s electricity needs. To add eco-fuel to the fire, a new report by Solar Energy UK estimates growth in British solar has more than doubled in the last 12 months, a trend set to continue.
Is the end in sight for Fossil Fuels?
Despite our optimistic enthusiasm for wind and solar power, one way or another, for now fossil fuel use is woven into the fabric of our economic and social lives. According to Moneyweek.com, that will be the case for many decades to come. In his book There is no Planet B, climate-change author Mike Bernes Lee argues that the challenge is not to replace current fossil fuel use with renewables, but that instead, our target is always on the move.
To put things into perspective, even with drastic changes in energy efficiency and innovations in technology, the world’s net electricity consumption has increased 106% since 1970. In many ways the transition into cleaner, renewable energies is a moving feast, where sustainable development must keep up with energy consumption patterns spreading like wildfire.
Vitally, after many years of efforts, in their most recent report, Our World in Data revealed coal, oil and gas still make up 80% of our energy mix, the same number as a decade ago. On top of this, if you think UK consumers are willing to pay a “greenium” for renewably sourced electricity, I suggest you think again. Around a fifth of UK adults have less than £100 in savings according to research by Yorkshire Building Society. Contracting a green energy tariff is unlikely to be at the top of their shopping list. Its seems neither people nor companies will switch to renewables because greener sources are easier to access, cheaper or more energy dense, but because regulation implores them to.
So, what can be done? …
The UK has no choice but to move away from fossil fuels, but things won’t move as fast as we might like. There is a bargain to be found in the uptake of renewables, but that rapid fire transition to green electricity may not be so rapid but it can be transitional.
Regard for power is also critical, educating people to be efficient is an underpinning philosophy that we will address in a future article.
That being said, it has never been more cost-effective (or pressing, environmentally speaking) to join efforts in decarbonising the grid. Businesses should take matters into their own hands to accelerate the energy transition culture currently accelerating in the UK, cutting costs and reducing reliance on rising energy prices tied to fossil fuels in the process.
Where to start
For those looking to seize the day at the lowest price and difficulty, solar is a great place to start, followed by electrification and storage. Installing solar panels is an opportunity for any size of business in any sector. Investing in a solar array will cut costs, bring in additional revenue, reduce dependence on rising energy prices and curtail your carbon footprint. The more energy you need to use in your operation, the more your business and the planet will benefit from installing solar panels.
For those businesses and individuals strapped for cash or expertise on the subject, don’t despair! There are solutions in the market such as Power Purchase Agreements to access solar at zero initial capital cost. There are providers out there funding the installation of PV systems and taking care of their operations & maintenance at zero cost, helping their customers reduce costs and carbon hassle free.
For more information about how to find a PPA provider email us on email@example.com