If you’ve been watching the news it will come as no surprise to you that we are currently in the middle of a gas-price crisis. Wholesale gas prices have increased 250% since the beginning of 2021, and there’ been a 70% rise in gas prices since the beginning of August according to the Industry Group Oil and Gas UK. This price rise has caused numerous knock on problems for industries and consumers reliant on gas for a multitude of reasons. We take a look at the topic in more detail.
Why are gas prices rising?
There are numerous Global problems currently having an effect on the price of gas:
- There has been a Global uptick in gas demand as economies have started to open after COVID-19 lockdowns.
- The 2020-2021 winter was particularly cold, meaning that gas supplies and stockpiles were already reduced.
- Several platforms in the North Sea have had to close for postponed maintenance work at the same time.
- There has been a drop in supplies from Norway and Russia.
- The calm weather this month has meant that traditional renewable energy sources, such as wind turbines, have not been as effective and we have had to rely on gas to produce energy.
What effect is this having on the industry?
The gas price increase is problematic for smaller gas companies who are having to pay over the odds to provide their customers with continued gas. Many small companies have now gone bust, including People’s Energy, PFP Energy and Moneyplus.
The gas price rise is also causing knock-on problems for other industrial manufacturers. Earlier this month, large fertiliser plants in Teeside and Cheshire were forced to shut down due to high gas prices, meaning Co2 production took a large hit. Co2 is used in meat and food processing, so the closure of these sites is causing problems for supermarket shelves. The Government have announced a support package for one of these plants to stay open in the short term to mitigate the effect of the shortage.
How will the gas price rise impact me?
Problems within the gas industry will eventually filter down to gas consumers, and with the other supply and demand problems we are currently experiencing (shortage of HGV drivers), keeping shelves stocked and houses warm could become increasingly difficult as we head into the winter.
22 million households are currently connected to the gas grid, all of which are supplied gas by their respective gas providers. Currently, there is a gas price cap implemented by the Government to limit the amount of money that companies can charge for gas. This is due to rise to £1,277 in October 2021, and £1455 in April 2022, nearly £400 more than the current cap. Gas providers are likely to charge the full price cap with the cost of wholesale gas being so high, meaning that consumers will be hit directly where it hurts – their back pockets.
Industrial manufacturers will also likely have to decrease output if gas pricing remains high. This problem, combined with the current shortage of HGV drivers, fuel problems and limited supply of Co2, will result in supply chain difficulties in the food and beverage industry. It is likely that our supermarket shelves over Christmas will look fairly limited if problems continue.
Gas is also used in the production of electricity, and with the calm weather conditions that we are currently experiencing reducing the amount of electricity produced by wind turbines, extra gas will have to be used to maintain the electricity demand across the country. This will in turn increase electricity prices over time.
What is the solution?
In the short-term, there is not a great deal that can be done and consumers will have to brace themselves for a rise in their gas bills.
The Government are supporting Co2 producers and energy companies to get us through the winter, and it is expected that supply and demand should level out as economies begin to steady over the coming months. However, with gas being a finite resource, the solution to the crisis needs to be a long-term strategy moving forward. The government have stressed the importance of continued investment and reliance on renewable energy solutions in the long term.
Diversifying the range of energy sources available to the country in the coming years and decades and finding ways of reducing our gas usage is essential to ensure our lights stay on and cupboards remain full.
How can I do my bit to help?
Although most of the solutions to the current gas price crisis are being worked on by world governments, there are some small steps that consumers can take to reduce their gas consumption – not only to help preserve gas, but to also preserve the amount of money being spent on gas with the incoming price rises.
In 2020, domestic heating accounted for 38% of gas usage across the UK. Although it is important to keep our homes warm over the winter, many people are using more gas than is needed as their homes are not insulated enough. This means that heat, and essentially money, is being wasted trying to keep rooms warm.
There are many solutions to increasing the amount of insulation within your home – including loft insulation, spray foam insulation and improving the windows and doors in your home. However, many people often forget about their conservatory when making home improvements and, with standard polycarbonate roofing, a conservatory can often be one of the most difficult rooms to keep warm as most heat will rise through the poorly insulated roofing.
What can I do to insulate my conservatory?
Insulated conservatory roofing has been an option for many years, and consumers with an insulated roof will find it much easier to retain the heat within their home and save money on gas, limiting damage from the gas price crisis.
"We can see from the volatile gas market we're currently experiencing, investing in renewable energy and energy saving measures in the home is increasingly important - not only for the environment, but for our own pockets as well", says Brennan Jacomb, Managing Director at Green Space UK, "insulating your conservatory roof is one of many measures available to homeowners to help them reduce the amount of energy that they are using on a daily basis, particularly as we head into the winter".
Here at Green Space UK, we offer a fully insulated conservatory roofing option that takes less than a day to install.
Our insulated conservatory roof panels are made of aluminium wrapped around a thick layer of condensed insulation. The panels replace your existing panels like for like in your current roofing frame, with an installation process that is quick, easy and hassle free. The insulation inside of the panels prevents the transfer of heat through the conservatory roof, conserving the warmth in the room and resulting in less initial heat needed to keep the room at a comfortable temperature.
If you would like to find out more about how our insulated conservatory roofing panels can help minimise the effect of the gas price crisis on your own pockets (and help the environment!), get in touch with us today using our quotation form.
