Soaring energy prices are helping to create a cost-of-living crisis, with the average family’s energy bill rising by 54%. The energy price cap has been raised to £1,971 and a further increase is expected later this year, which would take the average household bill to about £2,300. The government has responded by offering a one-off £200 discount on bills from October, to be paid back over five years.
The UK is not alone: energy prices are rising around the world as industries struck by Covid-19 lockdowns resume operations, and energy supplies still need to ramp up after plunging two years ago during the first lockdowns. The war in Ukraine is adding to the problem: Vladimir Putin has used his dominance over EU energy supplies (Russia supplies 40% of Europe’s gas, and 60% of Germany’s) as a weapon of war, and turned down the gas taps by a quarter before the invasion.
Putin could tighten supplies still further, and in any case the EU wants to move away from Russian fossil fuels to stem the flow of money to the Kremlin war machine – Europe has paid more than €15bn (£12.6bn) for Russian gas, oil and coal since the invasion began.
The UK relies less on Russian fuel, which makes up only 3% of UK gas supplies and about 8% of oil, but British consumers will be hit anyway as the price of gas is set by international markets that are badly affected by the war.
Now the government is publishing a strategy to secure the UK’s energy supplies and try to dampen soaring costs for consumers and industry.
Renewable energy will play a significant role, with the government planning to rapidly increase the goal for offshore wind generation, and relax the planning rules that have prevented onshore windfarms being built in England for most of the last
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