The price of business gas continues to rise as the residents of the UK continue to endure the consequences of the pandemic. One of the main impacts of the pandemic is that there is an enormously intensified demand for energy with a lack of supply to meet the current requirements. But there is more to it than meets the eye.
Energy companies are constantly pressuring consumers to switch to renewable energy sources. Even so, gas-fired power remains the monopoly for the country’s electricity generation for a majority of the energy providers. Similarly, more than half of the country’s consumers use electricity that is generated by gas.
The Justification For The Rise In Energy Prices
China and Russia are maintaining their feedstock locally as opposed to Europe which is facing a shortage of resources as the economies deal with the setbacks of the COVID-19. In addition to these setbacks, several gas-fired plants in the UK have closed due to the change in weather conditions. The prices for British energy consumers have also gone up because of a recent fire in a power cable coming from France to Britain. The combination of these developments means that British consumers are now paying 184.6p per therm which is 12% higher.
In a few weeks, the North Sea Link which connects Norway to Blyth in northern England will become operational. The functioning of the North Sea Link will help to reduce the strain on the current resources. In 2018, there was a change in the rule for price caps. Consumers are seeing the prices fluctuate rapidly because, according to the new rule, the most expensive bidder sets the price cap instead of the average of the bids. This also indicates that Ofgem does not have any intention to intervene to curb the prices for UK consumers.
This can be a positive development for the generators and investors but with a heavy price on the consumers.
How Consumers Can Deal With The Consequences?
In the last five weeks, five energy suppliers have failed. This brings the total number of energy suppliers that failed within the last year to seven because they were unable to deal with the increases in the market price for gas and electricity. Consumers of energy suppliers that have gone bust are advised to let the dust settle before making any impulsive moves. These consumers must switch to a new supplier.
MoneyPlus and PfP consumer accounts are being taken over by British Gas according to the appointment by Ofgem. The accounts of more than half a million consumers will be looking for new suppliers because of the energy providers that have gone bust. It is advisable for consumers to be patient to find out who their new supplier will be before deciding to change to a new supplier. Consumers can find out who their new supplier will be in a few days and they can decide to change if they are not satisfied with their current provider.
In the few days that it takes consumers to find out who their new supplier will be, consumers are advised to scour the market for the best deals based on their current energy consumption. Make sure you know how much energy consumption is and try to find the best deal in your local market based on that information.