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The harsh reality of the energy crisis

The energy crisis and the mounting cost of living has had a devastating impact on residents of the United Kingdom.

Both crisises have caused a mental health crisis, and caused more people than ever to slip into fuel poverty.

We believe in confronting the realities of the energy crisis.

Here is the reality of the situatiuon that the country is living in.

Has this been years in the making?

Following the privatisation of the gas and electricity sectors by the Thatcher-led government in the 1980s, the newly profit-hungry energy companies embarked on a ‘dash for gas’ – transitioning the British electricity generation away from coal towards modern gas-fired power plants, fuelled by newly discovered cheap gas supplies in the North Sea.

Over time, Britain became increasingly reliant on gas to power the country. Today, 86% of British homes use gas for heating, and more than a third of electricity supplies come from gas power plants.

In the mid-2000s, however, domestic North Sea gas production began to fall sharply, while demand continued to rise.

As a result, Britain became increasingly dependent on gas imports. In 2020, Britain imported around half its gas to meet demand – much of it via pipeline from Norway, the Netherlands and Belgium, with the rest imported by ship in the form of liquefied natural gas from Qatar, the US and Russia.

Given this reliance on imported gas, one might assume that Britain would have invested heavily in storage capacity to provide a buffer against market shocks. But the country’s largest storage site, the Rough facility off the Yorkshire coast, which previously accounted for 75% of all the nation’s gas storage, was closed in 2017 by its owner Centrica. Today less than 1% of Europe’s stored gas is held by the UK.

This lack of storage capacity left Britain’s gas supply at the mercy of volatile global markets, with few tools available to soften the impact of any future supply shock.

This is the main reason why Britain has been among the hardest hit countries from surging gas prices: it is more reliant on gas for electricity generation than most other European countries, and its lack of storage capacity means it is particularly vulnerable to sudden price swings.

What is the current situation?

Grim news about the UK economy keeps mounting. Last week, the Bank of England forecast a 15-month recession, with inflation peaking at more than 13 per cent.

The energy price cap, which limits how much households can be charged, is now forecast to soar 80 per cent in October from today’s record levels, pushing many into a dire choice between heating and eating over the winter. Mortgage and rental costs are also rising.

Yet with the government paralysed as it awaits the outcome of a Conservative leadership contest that is still ignoring the scale of the problem, there is still no clear and realistic near-term cost of living strategy — just when the most vulnerable need it the most.

The UK faces its worst bout of stagflation — low growth and high inflation — since the 1970s. A reliance on natural gas imports and a sluggish post-pandemic recovery in its workforce means UK inflation is a toxic mix of the energy-driven type facing continental Europe and the wage pressures at play in the US.

Underlying the BoE’s stark forecast was the equally bleak calculation that in order to bring inflation down it needed to lift interest rates enough to cool the jobs market and investment, engineering a downturn in the process.

Now, fast forward to the present day and the situation is still not much beter.

As the cost of living bites, people need to know the truth.
Costs are rising amid the cost of living crisis.

Britain’s existing emergency power supply plans are largely designed for outages caused by huge storms or faults in the system rather than supply shortages.

But officials are having to confront the possibility of shortages stretching over months. In one “reasonable worst-case scenario”, millions of households could be forced to cut consumption at peak times.

The business secretary, Kwasi Kwarteng, beamed as he sat alongside the tartan-tied Centrica boss, Chris O’Shea, for a photograph last month.

The British Gas owner had just signed a deal with Norway’s Equinor for enough gas for 4.5m homes over the next three winters.

But O’Shea and Kwarteng now have a different deal to thrash out, over the rough gas storage site in the North Sea. Centrica shut it down in 2017, but has now submitted an application to reopen it.

What do we do?

We understand how hard the energy crisis has been on people.

Millions of people have been thrown into fuel poverty and have been left unable to pay bills.

We want people to know that we are here to help.

The first step is to submit an application with us and a dedicated adviser will be in touch.

Once the process has started you can rest easy.

We are here to help you through the energy crisis.

You do not need to suffer in silence.

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