Industry analysts say that if the government had undertaken more to alter the United Kingdom’s energy market sooner, low-carbon heating and renewable energy might have done a lot more to alleviate future gas supply difficulties – and could have done a lot more to mitigate the effect of this winter’s high gas costs. The gas shortage has sparked a rush of government meetings with the sector, as well as promises from Kwasi Kwarteng, the business secretary, in parliament that “the lights will not go out” and that the United Kingdom is “highly resilient.”
However, as per Roger Fouquet, who works as the London School of Economics, supply issue reveals that fossil fuels are fundamentally prone to huge price changes, which occur at least once per decade. He explained that “price volatility is an unavoidable component of fossil fuel energy system.” “These market-related issues do not affect renewables.”
Switching to renewables decreases the impact of fluctuating fossil fuel prices, but the UK remains “especially susceptible to international gas pricing,” according to UCL’s Rob Gross. “Prices [in the UK] are determined by gas power stations, especially when high usage and renewables supply are low. Prices are less volatile in countries with a smaller gas component in their power mix, and we can expect the same here.”
According to Dan McGrail, the government should learn from this, who serves as the chief executive officer of the RenewableUK, which does represent wind energy companies. “Of course, the government and the sector’s first obligation in responding to this price spike is to protect consumers. The only long-term solution is to possess an energy system driven by low-cost renewables, using flexible storage, hydrogen, as well as other low-carbon solutions to satisfy demand at the lowest possible cost.”
He noted that it was already cheaper to generate energy by establishing a new wind farm than to run an established gas power plant even before the gas cost rose. In the last several years, the UK’s reliance on fossil fuels has dropped from 60 percent to under 40 percent, thanks to the expansion of renewables.
“The sector is working with the government to expedite investment in the renewables, which is critical to eliminating our dependency on gas for home heating and heavy industry,” McGrail added. We need to flip the dial on green hydrogen generation and electrification in the UK to attain net-zero at the lowest cost, in addition to significant investment in renewables.”
Solar power has also dropped in price in recent years, notwithstanding a lack of government support. Solar presently produces approximately 4.5 percent of the UK’s electricity. It is expected to overtake onshore windfarms as the cheapest form of energy within a few years. According to Chris Hewett, solar energy could continue to generate electricity during the winter, who serves as the chief executive officer of the trade organization Solar Energy UK. Still, he believes it is “eminently doable” to triple that by the year 2030, at no expense to customers, if the government removes regulatory barriers.