UK and European gas prices soar by over 20%

by siddhikale23@gmail.com

Bасkgrоund:-

  • Petrol prices have reached an all-time high, concerns that the cold winter could intensify the crisis that has led to the collapse of many energy suppliers and raised fears about industrial closure and rising debt.
  • Amid growing global energy prices, the cost of carbon and coal  permits reached record levels with $80 crude oil on Tuesday for the first time in three years.

Linkаges:- 

  • Winter delivery gas for British consumers jumped more than 20% to 218.4p therm during early morning trading. European gas prices have risen by 10%, and price pressures have been boosted by Russia’s declining supply.
  • Sales fell Tuesday as Russia’s gas pipeline through the Yamal pipeline and Europe dropped by more than half, reports Interfax news agency, citing information from Gascade operator gascade.
  • Since past few years, market prices have quadrupled in UK which has worsened the situation.
  • Rising prices in Europe have been linked to unusually low gas storage costs in the UK, as well as shutdown of the power system, including fires on critical power inputs, which have led to increased reliance on power plants.
  • Consumers have been warned to expect higher debt and further failure of domestic energy suppliers, while the heavy industry and the food and beverage industry are facing the prospect of closure and shortages of pre-Christmas products.

Сurrent  Sсenаriо:-

  • The “winter gas season”, when the demand for heat is usually higher, starts on October 1 and there are forecasts of colder temperatures than normal winter.
  • While ministers stressed that the UK has enough gas to prevent the lights going out or a three-day operation in the 1970s, analysts have warned that low temperatures could eliminate the problem.
  • In this cold, Europeans and other countries especially those who cannot afford current electricity prices could face lower natural gas supplies, if winter gets much colder than usual.
  • His colleagues at Refinite have warned that even hotter temperatures than expected would “not be enough” to lower prices.
  • On Monday Russia’s power supply through Yamal – Europe  pipeline was 35,131 MWh per hour which then dropped to 15,021 megawatts (MWh) per hour.
  • A group of European politicians wrote to the European Commission this month calling for an investigation into whether Russian power company Gazprom was deliberately trying to stop the flow of electricity into Europe.
  • They expressed fears that Russia was using its gas volume in the region to increase pressure to accept the Nord Stream 2 pipeline, which should have been sanctioned and awaited the approval of more laws.
  • A Kremlin spokesman denied Russia’s use of gas as a weapon against Europe and said Gazprom was ready to export its goods to Europe.
  • As electricity prices rose, oil also followed, Brent sold more than $ 80 a barrel for the first time in three years before the collapse and as traders made a profit.
  • Markets were partially responding to the gas crisis, amid expectations that some firms would switch to oil to boost their performance. Goldman Sachs predicted that Brent crude could hit $ 90 by the end of the year.
  • Recovery in economies such as China and India following the Covid-19 depletion has also forced a rise in the price of fuel, with coal-fired, coal-fired power plants, up 96% this year.
  • Prices are driven by a power outage in China, where efforts to decarbonise meet the reality of a widespread industrial breakdown and disrupt domestic energy supply as winter approaches, fuelling the demand for coal.
  • As gasoline prices rise, so does the cost of carbon dioxide emissions.
  • Tim Dixon, lead analyst at Cornwall Insight, said: “The price of trading in the carbon industry in the UK also recorded [their] largest daily increase in our records, exceeding £ 8 per ton this morning to reach the maximum £ 75 per ton,
  • October’s electricity price at the Dutch TTF facility, European benchmark, had risen by 7.47, or 9.7%, by € 84.00 per megawatt (MWh) hour.

Imрасt:-

  • Rising fuel prices have left the UK in a state of crisis, with fears of families at risk as debt rises and power outages collapse.
  • During 1990’s “dash for gas” was made by UK. In recent years, it has become increasingly difficult to reduce fuel consumption in coal. That makes the UK more dependent on electricity for energy, with 86 percent of households using it for heating and more than a third of electricity from power stations.
  • The main reason for the current problem is the lack of gas supplies, as a result of declining production in Norway and elsewhere, and demand from Asia. And, to a lesser extent, due to low air and fire emissions last week which left the UK-France power link offline. Prices and carbon emissions have gone up, with older coal and more powerful power stations. High fuel prices have risen 176 percent since the beginning of the year, and electricity prices last month increased by 266 percent on average this year.
  • It didn’t have to be this way. Energy problems such as these are part of the cycle of fuel price fluctuations, depending on global and political conditions that cannot be controlled by any one nation. Countries that have prioritized low carbon emissions are highly protected from such shocks.
  • Gas prices will be a major problem this winter, but illegal solutions have been prioritized. Today’s Daily Telegraph recommends the installation of trackers to increase domestic gas production. But companies have spent years failing to deliver shale gas under UK laws. For one thing, some blame the energy price. Some want renewable levies to be deducted from electricity bills, which people will still have to pay in taxes.
  • The UK’s nuclear power agency says nuclear is the answer. However a new nuclear plant could take at least a decade to build, and the monetary model under consideration will leave energy debtors to bear the cost of construction goes beyond budget and plan.
  • With extraordinary unity, the UK government and its main political rivalry seem to see the only real long-term solution to cut the UK’s dependence on electricity by supporting renewable and other low-carbon alternatives in electric boilers, such as heat pumps.
  • The UK has a good record of renewable support and reduced their costs. Additional subsidies for wind and solar energy will be released at auctions starting in December. The world’s scorecard on energy use is very bad. A series of home-improvement or energy efficiency programs have been put in place, most recently the Green Homes Grant, which was demolished to upgrade only a tenth of the homes it was built for.

Curated by- Siddhi Kale

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