Long, cold winter ahead for Britain could keep gas prices soaring to record levels | Household bills

The UK faces a higher than regular danger of cold winter climate this year, in accordance to meteorologists, which threatens to ignite higher demand for gas and keep gas market prices sky-high till 2023.

Both meteorologists and power market specialists are predicting a grim season ahead for UK households, hundreds of thousands of which could lose their power provider as firms collapse below the strain of rising gas prices.

Gas market prices within the UK have quadrupled prior to now year due to sturdy international demand. The hikes had been compounded by a string of outages within the electrical energy system, together with a fireplace at one of many UK’s essential energy import cables, which has elevated its reliance on gas energy crops.

The market’s “forward” prices point out that gasoline prices are probably to stay at record levels via the colder months, bringing a winter of discontent for hard-pressed households.

Early weather-pattern modelling by the US forecaster DTN factors to a colder winter for the UK and northern Europe this year, with alerts of a weakening of the polar vortex “which helps send Arctic air on the move”.

Although it’s too quickly for official forecasts, DTN stated there was “certainly a greater than normal risk of a cold winter for the UK”, with February earmarked as “the coldest of the three winter months”.

Experts worry {that a} lengthy, cold winter will expose the UK to gas shortages and extreme market shocks as a result of its gas storage levels are dwarfed by shops in neighbouring European international locations.

Kim Fustier, an analyst at funding big HSBC, warned that, with European gas shops at levels properly beneath regular, a very cold winter could drive prices to new record highs. Gas prices had been anticipated to stay at exceptionally excessive levels this winter, she stated, and to keep excessive subsequent summer time earlier than normalising in 2023.

“A colder-than-average winter could push storage levels to dangerously low levels, raising risks of price spikes and/or shortages in some countries,” she stated. “The UK’s situation is more precarious than its European neighbours because of its very limited storage capacity.”

The UK has solely sufficient gas storage to meet 4 to 5 days of winter gas demand, whereas neighbouring European international locations sometimes have a number of weeks’ price of gas.

The gas market has already introduced factories within the north of England to a standstill, and derailed the carbon dioxide provide chain, which is important to the meals, drink and meat manufacturing industries.

The record gas value highs are anticipated to drive up power bills for hundreds of thousands of households from October, with additional value rises anticipated in April, which could drive a complete of 1m extra households into gasoline poverty by subsequent summer time.

Consumer teams worry that the collapse of small suppliers struggling to keep up with the surging value of gas could lead to susceptible households lacking funds from the “warm home” low cost scheme, which helps to make heating bills extra reasonably priced.

Gillian Cooper, the pinnacle of power at Citizens Advice, stated most of the poorest households had been “facing an incredibly tough winter, with rising energy bills and the £20-a-week cut to universal credit”.

“For people whose suppliers have failed, it’s an especially worrying time,” she added. “Many people on low incomes risk losing their £140 warm home discount when they’re moved to a new supplier. Some customers in debt may see their agreed repayment plans torn up.”

Cooper known as on the federal government and Ofgem to assure that nobody lost entry to “this vital financial support” once they had been moved to a brand new provider.

“And suppliers should ensure people in debt to failed companies have access to affordable repayment plans to stop them spiralling further,” she stated.

Back to top button